Initial Research: The stock market is a place where stocks and shares of companies are sold and traded. A share is a part of a company that you can buy therefore investing in that company. A stock is a term which reaches over all of your stocks from the same or different companies. Each company has a ticker symbol which is an abbreviation that they use on the stock market. This symbol can consist of numbers, letters or a combination of the both depending on the market.
Each company has different amounts of total shares and different prices for them depending on how good or bad they are doing on the stock market. Supply and demand is one of the biggest things in economics and it is important to understand. This is a method where companies look at the amount of products/services available and compare them to how much their buyers want, and from that they can decide the prices for all their products. If there is a good balance between these two things then the product and company become more valuable therefore rising the company on the stock market.
First 3 Stocks Invested In: The stocks I invested in first were Coca Cola because it is a very successful company as in everyone knows it and they have a really big range of customers. It is fairly stable when it comes to EPS and their risk grade is also low. The second company I invested in was Sony because I like their product ideas and I think they will do well in the future. They have a low risk grade on the stock market and they have fairly high and stable EPS. My third and final initial investment was Statoil because it is a Norwegian oil company and I think that oil prices will rise and that I will be able to make profit off of it even though it doesn’t look very good right now especially since it is the biggest oil company in Norway.
Half Way Reflection: Half way through the project, Statoil was doing the best, Coca cola in the middle and Norsk Hydro was doing the worst. Statoil is an oil company and the oil prices are rising so that is why it is doing so good right now and I bought Norsk Hydro at a peak so it started dropping therefore no one wants to buy them so I am stuck with all the shares. I sold coca cola because I think I bought them when they were about to reach a peak because at the beginning they were doing well and then they dropped far so I sold them as quickly as possible. I also sold Sony because I saw that they weren’t going to make me any money since they were so stable at around 0. My goal was to keep trying to sell Norsk Hydro to get rid of the negative percentages and buy some shares in other oil companies that would help me get back from the negatives.
Half Way Reflection Graph: The graph shows that my overall portfolio percentage has increased about 1.5% but took a dip below 0 around September 25th.
This graph shows my rank over the whole project with the rank on the y-axis and each day on the x-axis. (The lower the graph line the better) My final rank was 9th place.
The purple line on this graph represents my portfolio value over the last 3 months. It has been rising steadily with a few ups and downs.
Final Reflection: The best company in my portfolio was Statoil. The company that did the worst in my portfolio was Sony. Fun Fact: In 2013 Statoil was the 11th biggest oil company in the world and the 26th biggest company regardless of of industry by income.
I went through each company I bought throughout the project and asked myself why each of them did good/OK/bad. Sony: I think I bought it at a peak and then it dropped. Statoil: I bought it as the oil prices were still rising and that is why it is doing so well. Coca Cola: I think it is not doing well because it’s very risky to invest in this company since it is so big and you never know when it is going to drop or rise, so a bit more experience on the market would have helped(knowing when to buy it and sell it). Allergan: I think that it is not doing so well because it is a company that not many very people know of therefore little rises and little drops. Norsk Hydro: Is an aluminium company and I think it is doing well because there is a big demand for aluminium right now with all the items that are made using the material. Amazon: I don’t know why it is doing so bad right now but I think that it will rise very soon due to all the Christmas gifts bought through it.
If I were to redo this project I would look more carefully at the company's recent peaks/dips and try to predict if it is a good time to invest in that company at that time. I would also be more careful with when I sell my stocks for example not selling my stocks when they are in the negative percentages but rather to wait for them to rise again. The last thing that I would do differently would be to invest in more shares of the company I am investing in for example with Statoil, I invested in 130 shares which cost $15.18 each which isn’t a very big investment and it would have given me so much more money if I would have invested in more shares. Therefore I would invest in Statoil again but buy more shares because I was able to predict well their success with my knowledge of oil prices and the oil situation in Europe. I also knew that it is the biggest oil company in Norway and that Norway are big in the oil department. I would probably invest in Samsung because it earned other people's substantial amounts but I have to be careful of when it drops and make sure to sell it before which was a mistake those people made.
Before I started this project I knew nothing about the stock market. I really enjoyed it and I am interested in doing it again on my own or with some friends. I learned that researching companies before investing in them is very, very important since you could lose a lot of money if you invest in the wrong company at the wrong time and you could make a lot of money if you invest in the right company at the right time. In connection to that I figured out that it is very important not to sell your stocks when they are negative but rather to wait for them to become positive. I also learned that some companies are more reliable (less risky to invest in) than others. I learned how supply and demand affect the stock market (explained in initial research) and lots of vocabulary for example: Stocks=All your shares from same or different companies. Shares: All shares in one specific company. Dividend=The money that a company regularly pays (usually annually) to its shareholders. Ticker Symbols=A ticker symbol is an abbreviation used to identify traded shares from specific companies in different stock markets. These abbreviation can consist of letters and numbers depending on the market. I also learned some pros and cons about investing in the stock market. Some pros are: Earn substantial amounts of money for little work and you can choose what you invest in. The biggest con is: There is a high risk of you losing a lot of money.
Overall I thought this was a very fun and educational project and I really want to do something like this again either with a group of friends, family or just by myself. I learned a lot about the stock market and enjoyed the competition (even though I should have won).