Table of Contents. About The Stock Market Game Program 7. How to Use This Guide 9. How to Register 11. Teacher Support Center 15

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3 Our Mission The Stock Market Game is a comprehensive, engaging, real world program that advances student academic achievement in the core disciplines and enhances understanding of investment concepts among learners of all ages. 3

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5 Table of Contents 5 About The Stock Market Game Program 7 How to Use This Guide 9 How to Register 11 Teacher Support Center 15 Understanding SMG This section provides teachers with an understanding of how to implement The Stock Market Game program in their classrooms. 17 Teachers Guide 18 Team Building Skills 19 How to Read a Stock Table 23 Sector/Industry Research Worksheet 25 Understanding Portfolios 29 5

6 Terms You Need to Know 35 Rules of The Stock Market Game 37 Links 39 Managing Student Portfolios This section provides an overview of the management and support tools available to teachers in The Stock Market Game program. 41 Troubleshooting 43 Hot Tips 45 Participation Certificate 47 In the Classroom This section introduces teachers to the philosophy and organizational structure of the lessons and classroom resources available to teachers in The Stock Market Game. This section also inlcudes samples of lessons and publications. 49 Our Philosophy 50 Ready to Plan 51 Getting Started in The Stock Market Game (Lesson) 53 StockTalk (Newsletter) 65 In The News (Newsletter) 67 InvestWrite 69 How to InvestWrite (Lesson) 70 6

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9 How to Use This Guide Congratulations! By registering for The Stock Market Game (SMG) you will connect classroom learning to real world saving and investing. The SMG program is a comprehensive, engaging program that advances student academic achievement for students in grades 4 to 12. Your role is as an SMG Advisor. The purpose of the SMG Advisor s Companion is to provide SMG Advisors with an effective desk reference for understanding and navigating the SMG program, its online Teacher Support Center, and its online team trading portfolio. All of the information presented in the SMG Advisor s Companion is available in greater detail in SMG s Teacher Support Center. The Teacher Support Center is organized into three sections: 1. Understanding SMG 2. Managing Student Portfolios 3. In The Classroom Sections are color-coded for improved navigation and reference. Each section addresses a specific aspect of successful participation in the SMG progam. For example, Understanding SMG provides you with classroom management suggestions and a technical guide for navigating the online team portfolio. Manage Student Portfolios provides you with access to team portfolios, rankings, and a Help Desk facility. In The Classroom provides you with a searchable library of lesson plans, standards correlations, culminating projects, and other teaching resources. The SMG Advisor s Companion (or guide) answers the most commonly asked questions about implementing and using the SMG program quickly and effectively when there is no convenient access to the Teacher Support Center. This guide is organized using the same structure and color-coding as the Teacher Support Center. In addition to using this guide for classroom management and technical support, you may use the guide for informational communications with administrators, parents, and teachers. You are also provided with: Step-by-step registration instructions for those teachers who have not yet registered for the SMG program A complete lesson on how to get started with The Stock Market Game A complete lesson on how to prepare an InvestWrite essay Reproducible fact sheets and handouts to introduce teacher peers, parents, students, and administration to The Stock Market Game While this guide was created to provide SMG Advisors with support and materials, it does not replace the SMG program s Teacher Support Center. For the most up-to-date information and classroom support, visit the Teacher Support Center regularly throughout the course of the SMG trading session. In fact, it is advisable for SMG Advisors to visit the Teacher Support Center as soon as they receive their IDs and passwords. SMG Advisors login to the Teacher Support Center at the SMG Web site ( 9

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11 How to Register After you have clicked one of the registration links, you will be asked to select your country from a pulldown menu. Your options are the United States or International. Select one and click on the SUBMIT button. If you selected United States, you will be asked to select your state from a pull-down menu before clicking on the NEXT button. If you selected International, simply click on the NEXT button. If you are registering internationally or in a state with only one SMG Coordinator, you will then be taken to the Information Page for your local SMG program. If you are registering in a state with more than one SMG Coordinator, you will be asked to select the local SMG program nearest you from a pulldown menu. Select the program nearest you and click on the SUBMIT button. You will then be taken to the Information Page for the program you selected. Your program s Information Page contains the following tabs: Home Participation and Fees Our Sponsors Competitive Divisions Game Dates Teacher Training About Us Prereigster Now 11

12 You are encouraged to review the information in each of the tabs carefully. Do not hesitate to contact your SMG Coordinator with any questions. Your SMG Coordinator s contact information is provide in the Home tab. Click the Preregister Now tab to begin the registration process. You will be asked to select your Registration Type. There are four Registration Types to select from: 1. Teacher with Classes - If you are a teacher or adult who will be guiding students (grades 4-12, adult, or post-secondary) through SMG, select this type. 2. Teacher / Individual - If you are a teacher who would like to learn more about SMG by having a portfolio and participating in a teacher-only Game, select this type. 3. Adult - If you are an adult who would like to learn more about investing by having an SMG portfolio and participating in a separate adult SMG, select this type. 4. Post-Secondary/College - If you are a post-secondary or college student who would like to learn more about investing and participate in SMG as an individual, select this type. If you do not see one or more of the Registration Types listed, it means that your local SMG program does not offer it. For further information about this, contact your local SMG Coordinator. After you have selected your Registration Type, click the CONTINUE button to go to the registration form. Before filling in the registration form, please read the paragraph labeled ATTENTION PARENTS, TEACHERS AND ALL SMG PARTICIPANTS and click the box in the following paragraph, indicating that you have read the paragraph, understand its message, and will enforce the SMG Rules and Code of Participation. You must check the box before submitting the registration form. Fill in the blank fields on the registration form. In addition to providing contact information for you and your school, you will also select your game period and the number of classes (NOT teams) you would like to 12

13 register on the registration form. You will have an opportunity later to enter the number of teams per class. If you would like to register for an SMG workshop, enter the date of the workshop in the box under OP- TIONAL WORKSHOP SIGNUP. Any additional notes or questions for your SMG Coordinator should be entered in the box immediately beneath the workshop information box. Once you have completely filled out the form, click on the SUBMIT PRE-REGISTRATION button. 13

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15 Teacher Support Center The SMG program is a vehicle for the natural integration of specific knowledge and skills in the core academic disciplines with an understanding of investing and investment strategies. To cultivate this integration, the Teacher Support Center was established. The SMG program s Teacher Support Center is available only to teachers with teams registered in the SMG program (SMG Advisors). The Teacher Support Center is a searchable online database of classroom lessons, technical guides, and additonal teacher resources for implementing the SMG program and teaching investing and investing strategies. SMG lessons and activities support the creation and management of an online investment portfolio, while providing opportunities for students to apply and extend research, math, technology and language arts skills. SMG lessons are correlated to subject standards in math, economics, English Language Arts, business, social studies, technology, and Family Consumer Sciences. In addition to lessons and activities, the Teacher Support Center makes it easier for you to integrate the SMG program into your classroom by providing you with the information and resources you need to customize essential Throughout the guide you have been lessons, determine standards and use assessments to meet the provided with the path to access the needs of your students. You will also have access to industrybased materials that keep lessons current, assist students in cific Teacher Support Center item will materials online. The path to a spe- conducting research and provide for students at differing levels be written out using the following format with the carat representing of expertise and experience. click or go to : The message you received that confirmed your SMG registration contains your SMG Advisor ID and password. Your SMG Advisor ID and password provides you with immediate access to the Teacher Support Center. You are encouraged to login to the Teacher Support Center before introducing the SMG program to your students. You login on the same page your students will use to login to their team portfolios: The preceding page provides a screen shot of the Teacher Support Center homepage. This guide is organized to mirror the three major sections of the Teacher Support Center: SECTION > TOPIC > ITEM. For example, to access the first section of the online Teacher s Guide, you would locate the Understanding SMG section, then click Teachers Guide, and then Click Here to View The Teacher Guide, and then click Ready, Set, Go. The path would be represented as: 1. Understanding SMG 2. Manage Student Portfolios 3. In the Classroom UNDERSTANDING SMG>TEACHERS GUIDE>CLICK HERE TO VIEW THE TEACHER GUIDE>READY, SET, GO All of the materials in this guide are available online in the Teacher Support Center. 15

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17 Understanding SMG If you are a first-time SMG Advisor, you are especially encouraged to visit the Understanding SMG section of the Teacher Support Center. Understanding SMG provides you with suggested ways of implementing the SMG program in your classroom (the Teachers Guide), a technical guide for navigating your students team portfolios (Understanding Portfolios), trading rules and restrictions in The Stock Market Game (Rules of the Game), an online catalog of SMG branded items you may purchase to use as in-class prizes (Promotional Materials) and links to additional reseources (Related Links) This chapter of the SMG Advisor s Companion only presents a portion of the materials available in the Understanding SMG section of the Teacher Support Center. For full descriptions and additional materials, logon to the Teacher Support Center. 17

18 TEACHERS GUIDE Involving Your Parents The application of core academic disciplines to current events and the life skill of saving and investing create rich opportunities to engage parents in their children s learning. You should feel free to copy the About The Stock Market Game Program flyer at the beginning of this book and other pages you feel are appropriate for distribution to your students parents. Teams Often in SMG lessons, students are asked to complete activities in their SMG teams. It is recommended that students participate in the SMG program in teams of three to five members each because of the opportunities it creates for students to practice life skills like cooperative decision-making, conflict resolution, and time management. Grouping students into teams also allows for a more manageable classroom, especially in situations where access to computers with Internet connections is limited. It is up to you to decide whether your students participate individually or in teams. If you chose to place your students into teams, share TEAM BUILDING SKILLS on the next page at their first meeting. The activity will help your newly formed teams work more effectively and more efficiently. Assigning roles to team members also insures each team member participates in the learning process, is accountable for group assignments, and supports group decision-making. The following are suggested team roles. Any combination of roles is possible, including rotating them and teaming students to take on several roles as a group, i.e., research could be done by all team members. Captain/Director - Coordinates the efforts of entire team including team activities, maintaining their password and checking their Rankings report. Basic Economic Research Coordinator - Coordinates team research fundamental economic data regarding the overall economy and relevant current events which could affect companies whose stock the team owns or is thinking of buying. He/She uses their team portfolio s Outside Links, additional internet sites, newspapers, etc., to report on current market activity, economic indicators, news about the industry, etc. Technical Economic Research Coordinator - Coordinates team research of market data for companies whose stock is owned by the team or is being considered for purchase or sell. He/She uses their team portfolio s Investor Research feature and other research web sites to report on the current market condition. He/She also finds stock ticker symbols and checks stock data (highs, lows, and closing prices). Record Keeper - Keeps a record of all transactions made by their team and uses this information to verify portfolio data. He/She reviews their team portfolio s Transaction History, Account Summary, Account Holdings, and Gains & Losses reports for accuracy. Transaction Reporter - Enters transactions into their team portfolio and checks their portfolio s Pending Transactions and Transaction Notes reports for error messages. Charter - Charts on graph paper (or in Excel) the daily (or weekly) ups and downs of each stock the team owns. 18 For a complete description of forming teams, login to the Teacher Support Center and follow this path: UNDERSTANDING SMG>TEACHERS GUDE>CLICK HERE TO VIEW THE TEACHER GUIDE>ORGANIZING YOUR CLASS

19 TEAM BUILDING SKILLS LEARNING COOPERATIVELY Your success in The Stock Market Game depends in part on your successful participation in a cooperative team. You will be making decisions as a team as you build your team portfolio. To be successful, you apply these important ideas used in face-toface cooperative learning: Be responsible for your own learning. Share your knowledge freely. Learn what you can from others. Foster interdependence by asking for and giving help. Express your ideas openly. Listen carefully to feedback. Be a good critical friend. Share responsibility for decision-making. 19

20 CONSENSUS BUILDING You will be using consensus building when you decide as a team how to build your portfolio. Will you buy and sell every time you meet? Will you set a limit on the number of stocks you will hold? Will you invest your $100,000 all in the first few meetings? How will you select stocks? How will you decide when it is time to sell? Consensus building is a continuous process and your team will be involved in these steps at various stages and times in your decision-making. 1. Listen. Be sure that each team member has a full understanding of what other team members are saying. 2. Contribute. Share all relevant information even if it conflicts with personal interests. 3. Inclusion. Ensure that everyone is included in the decision-making process. 4. Evaluate. Determine what points team mem- bers agree on and what points they disagree on. Spend time evaluating the differences. 5. Time. Don t waste time discussing those points that team members already agree on. 6. View. Conflict about ideas, solutions, rationales, and predictions should be viewed as helping, rather than hindering consensus. These conflicts help ensure that all sides of an issue are explored to the satisfaction of all team members. 7. Look. Observation of both verbal and non-verbal signs from team members will help determine when consensus has occurred. In many cases a formal vote on an issue is not necessary. 8. Compromise. When used in consensus building, it doesn t mean that a team member will give up a position in exchange for support on another point. It does mean that the opinions of all team members are equally important, that each member will discuss an issue with an open mind, and is willing to fully support a decision made by the team. Try this consensus building exercise: 20 Choosing a Team Name Brainstorm - Have everyone list several ideas with reasoning but no evaluative comments. Get into the habit of requiring everyone on your team to participate. Let your style show with the names you suggest! Evaluate - Have each person choose their first two choices for names and see if you have overlap. Reduce the list to four names or less. Discuss - Don t vote! Ask each person to give a pro and con for each of the top four names. Based on this analysis, choose your top two names. Do pros and cons on the top two names with each person making a proposal for the top name and others chime in with support. Decide - If necessary, take a vote at this point to select the team name. Voting is only used when a team can t make it to consensus.

21 Computer Access Limited access to computers does not make the SMG program less effective. The fewer computers available, the more explicit team management must be. For example, if access is limited, teams will need to manage their computer time, so they can look at their portfolios, enter transactions, and/or research current events or potential investments, while allowing enough time for other teams in their class to do the same. Older students with access to computers at home or in after school programs, might be asked to conduct research outside the classroom and come prepared to conduct transactions on the following school day. In some cases it may be necessary to assign one student to enter team transactions and print out team reports. Time For a complete description of SMG Time Management, login to the Teacher Support Center and follow this path: The SMG program is designed to allow for maximum flexibility. SMG trading sessions are available throughout the academic year. Experienced SMG teachers tell us it takes only a few lessons to get students ready to conduct transactions. The In The Classroom section of the on-line Teacher Support Center provides a set of recommended core lessons for before; during, and after the teams invest. Core lessons provide basic information and concepts necessary for effective investing. They are designed to take one class period. Teachers are encouraged to use all or part of the lessons. UNDERSTANDING SMG>TEACHERS GUDE>CLICK HERE TO VIEW THE TEACHER GUIDE>HOW MUCH TIME WILL THIS TAKE? Reading Stock Data SMG provides the tools and materials needed to better understand long term investing and the stock market. The SMG core lesson, Identifying Ticker Symbols and Interpreting Stock Quotes, available in the In the Classroom section of the Teacher Support Center and additional activities show you and your students how to read and understand stock quotes. The How to Read a Stock Table handout is included in this guide. For a complete description of reading stock data in SMG, login to the Teacher Support Center and follow this path: UNDERSTANDING SMG>TEACHERS GUDE>CLICK HERE TO VIEW THE TEACHER GUIDE>READING STOCK DATA In addition to the lessons and handouts on the Teacher Support Center, you may print out parts of the Teacher Support Center s Investor Background section to use with your students. You may also wish to visit Path to Investing ( an acclaimed educational Web site offering unbiased and practical investment information. Doing Research Research is a key element in building and managing a successful investment portfolio. Students in the SMG program are expected to do their research before entering their first SMG trade. Their team portfolios have an Investor Research section where they can access news articles, price charts, and quote summaries for companies they are considering trading. Researching information online or in the newspaper is integrated For a complete description of conducting research in SMG, login to the Teacher Support Center and follow this path: UNDERSTANDING SMG>TEACHERS GUDE>CLICK HERE TO VIEW THE TEACHER GUIDE>WHERE DO I BEGIN MY RESEARCH? 21

22 into many of the lessons you may access in the Teacher Support Center. For example, while teaching the lessons from the first core lessons unit (Before You Invest) students will identify and learn to utilize the background information needed to make sound investment choices. They will research how companies are organized, why companies go public, and how to locate them on the three exchanges (the New York Stock Exchange, the NASDAQ, and the American Stock Exchange). Some teachers prefer to have their students begin their research by looking into different industries. The Teachers Guide in the Understanding SMG section of the Teacher Support Center provides you with a handout for beginning and organizing student research: Sector/Industry Research. It is available in the Where Do I Begin My Research section of the Teachers Guide. 22

23 How to Read a Stock Table Sample Stock Table YTD 52-Week % CHG HI LO Stock (SYM) DIV Yld % PE VOL 100s CLOSE NET CHG Invest Mints s (YUMI) Column 1: This column shows the percentage change in the stock's price so far this calendar year. Percentage change = (today's closing price - price at end of last year) / price at end of last year Column 2: These two data sets show the highest and lowest price of the stock during the last 52 weeks. Column 3: This column presents the name of the company. This is not to be confused with a company's stock symbol. A stock symbol is a grouping of one to four letters used in place of a company's full or abbreviated name. This column may also contain various footnotes which the newspaper will explain. Here are some examples of what these footnotes may be: - The letter s : signifies a stock split - The letters pf : mean the stock is a preferred stock (*Note: The Stock Market Game only trades common stocks.) Column 4: This column shows the latest dividend, portion of the company s profits the company has paid to stockholders. Dividends are usually expressed at an annual rate, even if they are paid more than once a year. Column 5: The number in this column is the yield of the stock. The yield is the latest annual dividend divided by the stock's latest closing price. Yield = latest annual dividend/stock's closing price Column 6: The PE of this column stands for price/earnings ratio, which is a company's closing price divided by its annual earnings per share (usually after deducting taxes). If a company loses money during the year, it will have no earnings to put in the denominator of the PE ratio. In that case, the newspaper will probably put two small "ds" in this column to indicate that the company lost money during the year. P/E ratio = closing price of stock / earnings per share Column 7: This column is the stock's volume (or sales) for the day, which is the total number of shares traded. Column 8: This column presents the closing price (or last price) of the stock on this particular day, which means it was the last price at which the stock traded on that day. Column 9: This column shows the net change in the stock's price from the previous day's closing price, which is calculated by subtracting the closing price of the previous trading day from today's closing price. 23

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27 Evidencing Learning The SMG program has developed 12 core lessons for you to use to introduce your students to the stock market and investing. Each lesson has an application and assessment component. These lessons can be found in the In The Classroom section of the Teacher Support Center. For a complete description of SMG assessments, login to the Teacher Support Center and follow this path: UNDERSTANDING SMG>TEACHERS GUIDE>CLICK HERE TO VIEW THE TEACHER GUIDE>EVIDENCING LEARNING It is recommended that students maintain journals where they record meeting minutes, trades, track data, and build company profiles. The journals encourage students to reflect on their team s investment strategies, articles they have read, and any writing they may be assigned. The journals are useful instruments in measuring student progress. In addition to the core lessons and journals, the SMG program provides you with projects which evaluate a student s application of multiple concepts. The InvestWrite national writing competition is a project which provides students with an opportunity to apply what they have learned through the SMG program to resolving hypothetical economic/ investment scenarios. You are encouraged to have all your students participate in InvestWrite. Below are some suggestions from experienced SMG teachers for assembling a Team Folder to demonstrate student progress: Create a brief company profile for each stock your team owns during the game. Include a summary of the company s products, where it operates, strengths and weaknesses - especially in comparison to competitors - and copies of the most recent annual income statement and balance sheet (obtained from the company s annual report or other source). Collect basic data about stocks in portfolio including: 52 week high and low; PE ratio; volume of trading; Beta; etc. Clippings about stock or mutual funds in the portfolio - These can be newspaper clippings, Internet news articles, magazine ads or articles, etc. Current price of each stock or mutual fund the team owns at the close of the market each day or week. Put information in an Excel spreadsheet and create charts for each stock or mutual fund. Detailed record of any buy or sell transactions including: stock or fund name and ticker symbol, date of transaction, number of shares, price per share, total costs, broker s fees, and current equity. (Justify calculations in portfolio.) Create your own math problems using information in the portfolio. Compare data by charting your team holdings with the S&P or Dow Jones averages. Create a glossary of terms learned throughout the SMG program. Use SMG program activities as writing prompts journals. Using persuasive writing skills, students can cite their research and persuade team to buy or sell certain stocks or mutual funds. Using reflective writing skills, students can reflect on why a stock or fund did or didn t do well, why they disagree with a team s decision, why and how the economy is affecting their stock or particular industry, etc. Describe a current event and the economic environment that could affect investment decisions. Write an essay explaining an investment strategy and why it was successful or was not successful. Traditional assessments including pre and post test are also available. Rubrics for writing and projects are provided so students and teachers can judge work against a set of clear expectations. 27

28 Tips for SMG Teachers Teachers often share tips that have successfully supported the SMG experience for their students. The following are tips from teachers who have successfully used the SMG program in their classrooms: For a complete description of SMG teacher tips, login to the Teacher Support Center and follow this path: Investment Magazines - Have students use them for research and to learn about investing. Contact local brokers or bankers to get their past issues of investment magazines and newspapers. (E.g., Money, Forbes, Fortune, Value Line, Barrons, Wall Street Journal, etc.) UNDERSTANDING SMG>TEACHERS GUIDE>CLICK HERE TO VIEW THE TEACHER GUIDE>TIPS FROM SMG TEACHERS Local Brokers - Contact local brokers or bankers to make presentations to your students or to help students in the classroom. (They may also be willing to help with fees!) If the broker or banker cannot come to the classroom, arrange for them to answer prepared questions from students at a set time by speakerphone (if you have access to one in the class or school building). Teams of Mutual Fund Managers - Make each team a Mutual Fund Manager. Have each team develop their portfolio by selecting a variety of stocks from different industries to form their own mutual fund. This is an excellent way to teach students about mutual funds and about diversification within a portfolio. PowerPoint Presentation - As a culminating activity, have each team develop a PowerPoint presentation to present their portfolio to an audience of parents, investment professionals, other classes, etc. Evaluate teams on their research, technology, and presentation skills. (See Team Folders for suggested material for presentation.) Take Stock in Your Own State - Have students only select stocks from their own state - or stocks of regional interest - for their portfolio. You can find these stocks (and ticker symbols) in a local newspaper or through a broker. This is an excellent way to teach students about their state s geography, businesses, economics and investments. Have students present their portfolios to CEOs or business leaders in the state. (See PowerPoint presentations.) Opening Bell - Begin and end each period with the ringing of a bell (just like the real stock market), to indicate the beginning and ending of trading time for students. Web sites for Research - Provide each team with a web site that offers stock data research (many search engines do). Have each team find out all the information they can from the web site, then make a presentation to other class members. This can give students an idea of all the research material available and how/where to find it. Client Portfolio - Have each team develop a portfolio for a client, in the same way that a broker would. Make up fictitious client profiles - based on different investing styles. This is an excellent way to teach students about diversification and the role of brokers and financial planners. Stock Market Skit - Have students write their own skit to role play a stock trade with a broker, or a broker trying to convince a potential buyer that a particular stock would be profitable. SMG Bingo! - Create a bingo game with stock terms. Read definitions of the terms for students to create a Bingo! Bulletin Board - Keep a classroom bulletin board with headlines and articles of economic, industry, or stock market news that can affect student team portfolios (either positively or negatively). SMG Scavenger Hunt - Create a scavenger hunt to help familiarize students with stock market terminology, stock data in the newspaper, and local, state, and worldwide events that affect the stock market. Stock Newscast - If your school has a daily or weekly news cast, have students make weekly stock reports with the Dow Jones data, market news, top ranked teams, etc. 28

29 Understanding Portfolios Welcome Screen (Main Menu) The are two tabs on the Welcome screen of the team portfolio. The blue Trading tab provides an SMG team with links for researching potential investments, making trades, recording portfolio transactions, and managing their portfolio. The green Mutual Funds tab provides an SMG Team with an introduction to mutual funds and how they are traded in the SMG program. The Trading links available are: Account Summary Account Holding Transaction History Gains and Losses Investor Research Enter a Trade Pending Transactions Transaction Notes American Indices News Update (except on Welcome Screen) Assistance with portfolio research, creation, and management functions in the Trading links is provided by clicking the yellow question mark at the end of the Trading tab. Each link of the team portfolio has its own help section. 29

30 The Welcome page does not have a help section. However, there are resource links to SMG trading rules, an investment terms dictionary, and Path to Investing (an investor education site) under the Team Information table. In addition to the management and learning tools available on the blue and green tabs, an SMG team may access the following functions via the icons located at the bottom of the Welcome screen: Rankings - This link takes the team to the SMG rankings, which show how the team is performing compared to the other teams. Rankings are determined by either the total equity in the portfolios or the percentage growth of the portfolio equity compared to the S&P index. Outside Links - This takes the team to an annotated list of Web sites which may inform their investment decisions. The list includes links to U.S. stock exchanges, industry news and information sites, and federal information sites. Change Password - The team password assigned to will be a random sequence of capital letters and numbers. Teams may want to choose a new password that will be easier to remember. Teams may return to the Welcome page from anywhere in their online portfolios by clicking the Menu link on the upper left-hand side of the screen. It is important that teams logoff after they have finished working in their portfolio especially if the class shares computers! The logoff icon is available on the upper right-hand side of each of the portfolio pages. Click Logoff to exit the team portfolio. Teams are encouraged to logoff via the Logoff icon to help keep their portfolios secure. As an additional security measure, the SMG has a built in logoff function. If a team has not sent from or received information to their portfolio for more than 15 minutes, they will automatically be logged out of their portfolio. They will have to re-enter their username and password to log back in. Change Password Teams may not change the IDs they were assigned. However, they may change their passwords. SMG IDs and passwords are case sensitive and must be typed as they were initially assigned or entered (if the team changed their password). Teams may change their passwords at any time. Their new passwords are active immediately. If a team has forgotten their password, the teacher may contact his/her SMG Coordinator for an updated set of IDs and passwords. Investor Research A team can research stocks and companies through the Investor Research section. A wealth of information from the current trading price of a stock to corporate news that may impact its price can be accessed through this section. The team should click Ticker Lookup to find the ticker symbol for the company or fund they wish to invest in. They may select from several sources for ticker symbols including: 30 NASDAQ the New York Stock Exchange

31 Reuters TheStreet.com The team should click the arrow at the end of the Request box to access the information types available for a particular company. The team may view: Quote summaries from TheStreet.com Quote summaries from Reuters Daily and Weekly price charts from Reuters Corporate News from Reuters American Indices The American Indices section lists a number of indices, such as the Dow Jones Industrial Average (DJIA) and S&P 500, that people use to watch the market. Some of the indices contain companies from a variety of industries. These indices are used to indicate general market trends. Other indices are made up of companies from a particular industry ( e.g., insurance, technology, etc.). These indices are used to indicate general trends in that industry. Enter a Trade The Enter a Trade link is where a team enters buy, sell, short sell, and short cover transactions. The team begins by selecting the type of transaction they wish to make: buy, sell, short sell, or short cover. NOTE: To remove a stock that has been short sold from your Account Holdings, it must be Short Covered. Next, they enter the ticker symbol of the stock they are trading in the box next to Ticker Symbol/Validate Ticker. If they do not know the ticker symbol, they can click on the words Ticker Symbol and the Ticker Symbol Lookup window will appear. Once they have entered the ticker symbol for the stock or fund they wish to trade, it is recommended that they click on Validate Ticker to verify that it is the ticker for the company they wish to trade. When they click Validate Ticker the Ticker Validation window will appear, listing the name of the company and the current trading price. The team now enters the number of shares they wish to trade in the box marked: Number of Shares. Select the Order Type. If the team wishes the trade to go through regardless of the market price, select Market. If they wish to set a price limit, they select Limit. They must enter a limit price in the Limit Price box, if they have selected a Limit Order. Limit Orders do not carry over from day to day. If the Limit Price is not met, the trade will be discarded. Click on the PREVIEW TRADE box. If the trade is correct, the team enters their password and clicks on the CONFIRM TRADE button. If the trade is incorrect or the team wishes to change their trade, they click on the EDIT TRADE button and repeat the process of entering a trade. 31

32 Pending Transactions Pending Transactions is a list of all the trades that have been entered but have not yet been executed. A trade will appear in Pending Transactions after it has been entered and will remain there until it goes through and appears in Account Holdings the next business day. Pending Transactions lists the type of trade the team has entered, the number of shares, the ticker symbol, the limit price (if any), and the date and time the trade was entered. FOR END OF DAY TEAMS ONLY: Trades listed in Pending Transactions can be canceled before the close of market (4 p.m. EST). To cancel a trade, click on the Cancel Order link. FOR REAL TIME TEAMS ONLY: Trades appear in Pending Transactions briefly before appearing in Transaction Notes. Trades cannot be canceled. Trades are priced at the exact time it was entered, but will not appear in Account Summary, Account Holdings, Transaction History, and Gains and Losses until the next business day. Account Summary The Account Summary provides a financial summary of the team portfolio. Important information such as total equity and buying power are listed here. Account Summary displays current portfolio information. To view Account Summary information for a different day, enter the date (MM/DD/YYYY) and click on the Update Table button. Account Summary information for the date entered will be displayed with current information. Particularly helpful information on the Account Summary page includes: Cash Balance - the amount of money left over from the initial $100,000. This is the amount of money you have to spend on buying stock and short sales if you do not want to go out on margin (i.e., borrow money). A negative amount in the Cash Balance indicates that the team has already bought on margin. Total Equity - the value of the team s cash and stocks on the long position. Buying Power - the total amount of money available for purchases and short sales when fully extended on margin. Percent Return - the percent the team has gained or lost since the beginning of the SMG session. If the number is positive, the team has gained; if it is negative, money has been lost. For more definitions of terms and equations, click the yellow question mark at the end of the blue Trading tab. Account Holdings The Account Holdings provides a list of stocks currently held in the portfolio, including current price and unrealized gains and losses. Please note: If a stock is held in a short position, the shares will have 32

33 a negative sign (-) in front of them, indicating that is the number of shares owed to the broker. Particularly helpful information on the Account Holdings page includes: Unrealized Gains and Losses - how much money you have gained or lost on that stock at its current value. A negative number indicates a loss. % Unrealized Gains and Losses - the amount of money you have gained or lost on that stock as a percentage of the original cost. Option - if you click on the Trade link of the stock you would like to trade, you will be taken directly to the Enter a Trade function where you can make your trade. Gains and Losses Gains and Losses shows all realized gains or losses on stock and fund trades. Gains (or losses) only become realized when a position is closed, either sold or short covered. Interest received or paid and dividends received are also considered realized gains or losses. Transaction History Transaction History shows all activity that has occurred in the team s portfolio during the SMG session, including: trades, commissions, fees, interest (paid and received), dividends, stock splits, and other corporate actions. Transaction History is a good place for a team to look if they suspect there is something wrong with the reporting in their portfolio. The Transaction History report contains: transaction type (e.g., buy) number of shares ticker symbol date of transaction cost per share net amount of transaction fees and commission To see transactions from a certain time period, input the first date of the range in the boxes under Show From and the last date of the range in the To boxes. When inputting the year, input all four digits, not just the last two. If no dates are entered, the transactions for the last seven days will be listed. Click on the GENERATE SCREEN REPORT button to get the report of transactions. News Update News Update provides teams with three types of news feeds. A Reuters news feed for stocks and mutual funds, and financial news from TheStreet.com. Teams are encouraged to actively refer to News Update when making decisions about their portfolios. The News Update link is not available through the portfolio s Welcome page. However, teams may access it from any other page of the portfolio. 33

34 Transaction Notes Transaction Notes lists all of the trades your team has entered during the SMG trading session. If a transaction is executed successfully, Order Executed appears in the Description column. The following is a list of common error messages that may appear when a transaction is unsuccessful: Account Margin Exceeded by: $. There is not have enough money for the trade, even if the maximum is borrowed. Account Position Not Short. The team attempted to short cover a stock that was not in their portfolio in a short position. Cannot Buy a Stock Below $5.00. The team attempted buy a stock that was trading for less than $5.00 per share. This is not allowed in SMG. Could Not Cancel Order. The team attempted to cancel an order still in Pending Transactions, but the market had already closed for the day and the trade could not be canceled. Invalid Symbol or Price Feed System Down. The message means the team entered the ticker symbol incorrectly or part of the system may be down. Check the ticker symbol by using Investor Research and re-enter the trade. The ticker symbol may also be checked by going to Enter a Trade and using Ticker Lookup or Validate Ticker. Order Price is Away From Market. The team entered a limit price that was not met. Problem with Order. The order stayed in Pending Transactions too long and did not go through. If this happens, enter the order again. Security Not Found on Sec Mast Xref File and OSS Sec Mast. The team attempted to trade a stock or fund that was not in the system. Usually this means the stock does not trade on one of the three exchanges used in SMG. If the team is sure the stock or fund is traded on one of the three exchanges, the SMG Advisor should contact the local SMG Coordinator. Order Canceled. You canceled the trade before the close of market, while it was still in Pending Transactions. Symbol Price is Zero on OSS Security Database. There is no price or historical data for the security listed. This error message appears if there is an attempt to trade a stock that has been delisted or is not yet listed, e.g., an IPO. Unknown Quote Feed Error. Order Rejected. This message appears if SMG experiences difficulties getting a price from Bridge. If this message appears, re-enter the trade. Order Rejected. The team attempted to sell a stock that they did not own. 34

35 Terms You Need to Know Available Equity: The amount of equity available for supporting additional buy and short sell transactions. This is the most the team can provide for their part of the 50% initial margin requirement. If this figure is negative, all buy and short sell transactions will be rejected. Available Equity = Total Equity - [(Value of Longs + Value of Shorts ) x 0.50] Buying Power: The total amount of money available for stock purchases and short sales when fully extended on margin. Note that the payment of broker s fees and interest charges not only reduces your balance, but also reduces your ability to borrow. Buying Power = Available Equity x 2 Cash Balance: The amount of cash left from the initial $100,000. Once trading begins, the cost of all stock purchases is deducted along with any interest payments and realized losses. Any interest payments received, dividends, and realized gains are added back to the cash balance. If the cash balance is zero, any new buy or short sell transactions will be funded through borrowing on margin. If the cash balance is negative, this is the amount of money borrowed on margin. Commission & Fees: A 2% fee is charged on all stock transactions. The total of all commission fees is listed in the Account Summary. Each individual commission fee is listed in the Transaction History. Commission Fee = Value of Trade x 0.02 Cost Averaging: Averaging the cost of multiple trades (buys or short sells) of the same security. Like trades of the same security will be combined into one line in Account Holdings and Realized Gains/Losses. Cost averaging is done by dividing the total cost of all like trades in the same securityby the total number of shares traded. Delisted: A stock that has been delisted has been removed from an exchange and cannot be traded. A company s stock may become delisted if it files for bankruptcy, merges with another company, moves from one exchange to another, or fails to meet exchange minimum standards. If you try to trade a stock that has been delisted, your order will be rejected. If a stock you own is delisted, it will be liquidated and any gain or loss will appear on the Gains & Losses page. Initial Margin Requirement: The percent (50% in SMG) of collateral required to finance a purchase or short sell transaction. The concept of a margin requirement is aimed at: 1) limiting the amount of money that may be borrowed to finance trading in stocks (the Federal Reserve sets margin requirements); and 2) providing protection to the broker making the loan of money (for purchases) or stock (for short sales) against adverse changes in the market value of the collateral (long and short positions). See Maintenance Margin Requirement. Initial Margin Requirement = (Value of Longs + Value of Shorts ) x 0.50 IPO (Initial Public Offering): When a company switches from being privately owned to publicly owned (or goes public ), the initial offering of stock for sale is called an IPO. IPOs will be available for trading after they have been added to the SMG system. Interest on Cash: Money received for cash held in a bank account. In SMG, your average daily cash balance is calculated and you are paid interest weekly at an annual rate of 5%. Interest on Cash = Cash Balance x (0.05/52) Interest on Loans: Similar to the interest on cash balances, your average daily balance of money borrowed on margin is calculated and you are charged interest weekly at an annual rate of 7%. Interest on Loans = Money Borrowed on Margin x (0.07/52) Liquidate: To liquidate a stock holding, the stock must be either sold or short covered. To liquidate a portfolio, all open positions must be closed. Teams do not need to liquidate their porfolios at the end of the session. The Stock Market Game User s Guide 11 35

36 Maintenance Margin Requirement: Also known as Minimum Maintenance, this is the minimum margin requirement (30% in SMG) that a team portfolio must maintain after borrowing on margin. If the total equity in your portfolio falls below 30% of the value of your long and short positions, your team will receive a margin call and you will have to sell or short cover some of your stocks. Note: For the following formula, use the absolute value (positive value) of the Value of Shorts. Maintenance Margin Requirement = 0.30 x (Value of Longs + Value of Shorts ) Margin Call: A warning that the total equity in your portfolio has fallen below the 30% maintenance margin requirement; a request for additional equity in to meet the maintenance margin requirement. If you receive a margin call, you will have three weeks to meet the 30% requirement. This can be accomplished if the value of your holdings increases or by selling or short covering a stock(s). The proceeds of any sale or short cover will be used to pay off some of the money you borrowed (i.e., reduce the amount on margin). If the requirement is not satisfied within seven days, SMG will sell or short cover long and short positions, beginning with the lowest priced stocks, until the minimum maintenance requirement is met. Net Equity Gain: The amount of money your team has gained or lost since the beginning of SMG. Net Equity Gain = Total Equity - $100,000 Net Cost/Share: For stocks in the long position, the amount of money spent on each share of stock, including the commission. If multiple trades of the same stock were made, the net cost per share will be an average of the net costs per share of each trade. Net Cost/Share = price of each share of stock x 1.02 Percent Return: The percent gained or lost in the team s portfolio since the beginning of the SMG session. Percent Return: Net Equity Gain / $100,000 limit when entering a transaction in the Enter a Trade section. The use of price limits is optional and serves to protect you against sharp market movements. Realized Gains & Losses: The total amount of profit or loss realized from the sale or short cover of a stock. Interest received or paid and dividends received are also considered realized gains or losses. Any stock that is still held in your portfolio will not be listed in Realized Gains & Losses. Realized Gains & Losses = Proceeds - Original Cost Short Cover: Buying stock to replace the stock you originally borrowed from the broker for a short sell transaction. When you short cover, you are closing the short position. Short Sell: Borrowing shares of a stock from your broker to sell on the open market. At some point, you must cover the short or buy enough shares to return those you borrowed. Short selling is a strategy used by those who think the price of a stock is going to decrease in the short term. The idea is to sell the borrowed stock now at a higher price, and once the value of the stock falls, to buy it to replace the borrowed stock. The profit is the difference between what is paid per share and what is received per share. Beware if the price of the stock begins to rise, because at some point the stock must be bought back (short covered) and returned to the broker. The value of a short position is the current price per share times the number of shares sold short. Team Portfolio: A record of all transactions, activity, and stock positions of a team. It is typically updated daily. Total Equity: The net value of a team portfolio. Total Equity = Cash Balance + Value of Longs Unrealized Gain & Loss: The difference in the initial purchase price of a stock and the current value of the stock. The gain or loss is unrealized, because the stock has not been sold or short covered (i.e., the position has not been closed). Price Limit: The maximum you are willing to pay per share when buying or short covering a stock or the minimum you are willing to sell each share for when selling or short selling a stock. You may enter a price 36

37 Rules of The Stock Market Game 1. Each team begins the simulation with $100,000 in cash and may borrow additional funds. How much you may borrow is dependent upon the equity in your account. Interest is charged weekly on negative cash balances at an annual rate of 7.00%, and credited weekly on positive cash balances at an annual rate of 5.00%. Interest is calculated daily, then summed for the week (Saturday through Friday) and posted on the following Tuesday. The daily rate is based upon a 365 day year. Daily Interest = Cash * Appropriate Interest Rate(as a decimal) / You may trade only stocks and mutual funds listed on the American Stock Exchange, Nasdaq Stock Market and the New York Stock Exchange that have traded within the last 7 days. Canadian stocks traded on these exchanges will be priced within these markets but the current value is calculated using Canadian exchange prices adjusted using the current exchange rate for the American dollar equivalent. 3. End of Day Game transactions are priced at market daily closing prices. These prices can be found in the next day's newspaper or by using the price quote facilities of SMG. Real Time Game transactions are priced at the market price at the time of entry. All Mutual Fund transactions are treated as real time transactions and priced at the previous day's closing price. This applies to both End of Day and Real Time games. Transactions entered with a limit price will not be held past the initial attempt to price the transaction. This applies to both the End of Day or Real Time Games. 4. All buy orders must be a minimum of 100 shares. Sell orders for less than 100 shares will be permitted. 5. SMG does not permit buying stocks or mutual funds that trade below $5 per share. Such orders will be rejected. Sell transactions for existing long positions where transactions are executed at closing or real time prices will be accepted, even if the price is less than $5.00 per share. (There are a number of reasons for this rule. Low priced stocks, known as penny stocks, are very risky and volatile investments. Accordingly, brokers will not permit their customers to trade such securities on margin, just as SMG does not. Also, penny stocks tend to have very shallow markets and their prices move sharply with large orders, unlike SMG where transactions are executed at closing or real time prices regardless of order size). 6. Trades can only be processed in whole and will be rejected if sufficient buying power does not exist to execute the entire order. 7. A 2% broker's fee is charged for all transactions. For example, if you buy 100 shares of a stock at $10 per share, you must pay the 2% of $1000 or $20. On Sell or Shortsell transactions an SEC fee of $15.30 per million gross rounded to the nearest penny is also charged. 8. The Game is run Monday through Friday. Teams may trade on any day the participating stock markets are open. Orders may be entered 7 days a week 24 hours a day. 9. Trades entered after close of market (4:00 PM ET) will be priced at next day's closing price for the End of Day Game and at opening price for the Real Time Game. Mutual Funds are always treated as real time trades but priced at the last closing price. 10. Teams do not have to liquidate their portfolios at the end of The Game. Winners will be determined on the basis of either equity or the % return above/below S&P 500 Growth. (Some states may use additional criteria to determine winners). 11. All short sell orders must be for a minimum of 100 shares. Short cover orders for less than 100 shares will be permitted. Open ended mutual funds can not be short sold. 12. SMG does not permit short sells on stocks or mutual funds that trade below $5.00 per share. Such orders will be rejected. Short cover transactions for existing short positions will be accepted, even if the price is less than $5.00 per share. (See Rule #5 for an explanation). 13. A record of a team's portfolio and transactions will be available daily. A team will not receive a portfolio nor be listed in regional rankings until its initial transaction is entered successfully. A student can only be assigned to ONE portfolio per game period. 37

38 14. No back posting of trades will be done for trades of securities not contained within the SMG Security Table. Once the missing security has been added to the Security Table the security can then be traded. The same rule applies to trades rejected if they are incorrectly pricing below $5. Once the pricing has been corrected the security can be traded. 15. Stock and cash dividends and stock splits are automatically computed into your portfolio. However, you are required to check them for accuracy. Promptly notify your Coordinator at their address of any problems you encounter. Canadian stocks trading on US exchanges cannot be traded between a split's record date and payout date. 16. Participants of the end of day pricing game may delete pending transactions prior to market close except in the case of Mutual Funds which are processed as real time orders. 17. Any violation of the rules of the SMG may result in the invalidation of a transaction. Repeated violation of the rules may result in the disqualification of a team. 18. Additional rules have been developed in some states and, if applicable, have been included in your Coordinator's Information Page. It is the responsibility of your team to learn and abide by all rules. 4. The authority to remove a team from the rankings lies solely with the team's SMG coordinator organization. 5. Each team is responsible for any opening or closing transactions entered into its portfolio. 6. Teams may not enter transactions into portfolios other than their own. (Please note that when a team asserts that a transaction was entered by a non-member of that team, the team will nevertheless be ranked based on their portfolio's total equity, which will include the challenged transaction.) 7. Only transactions stored on the SMG database will be recognized for purposes of evaluating portfolio total equity. 8. FIE will be responsible for the accuracy of the market data. If a team believes a stock price or other information is in error, it shall notify its SMG coordinator organization. 9. In the event of an error on the part of FIE and/or coordinator organization(s), their liability to a participant shall be limited to the refund of registration or other fees paid. 19. You must maintain a total equity position that is greater than or equal to 30% of the current value of your current holdings. If you don't you will receive a margin call. Code of participation 1. SMG advisors must be responsible adults 18 years of age or older. In no case may they be a matriculated student in grades K SMG advisors will ensure that every participant on their team(s) has read and understands the SMG Rules and the Code of Participation. 3. Teams that do not comply with the SMG Code of Participation will be removed from the portfolio rankings. 38

39 Links The links below may enhance your SMG experience. However, some lead to commercial sites. The Foundation for Investor Education, the Securities Industry and Financial Markets Association, and the SMG program, have no control over their content. It is always prudent to visit a site first before introducing it to students. Path to Investing ( - an acclaimed, innovative educational website that features engaging relevent content and provides a variety of learning opportunities for investors with all levels of experience. TheStreet.com ( - a leading multimedia provider of business, investment and ratings content, available through its proprietary properties, which include Web sites, subscription services, print, radio, syndication and audio and video programming. The Company offers proprietary information on stocks, mutual funds, exchange traded funds (ETFs) and financial institutions. Investinginbonds.com ( - an award-winning web site for individual investors features daily updates and historical databases of municipal and corporate bond trades. Treasury prices and range of data and indices across bond markets. Tomorrowsmoney.org ( - is a suite of sites for people-especially woman in charge of family finances, young adults, Spanish-speaking Americans who need motivation, confidence and basic personal finance skills. Nasdaq Stock Exchange ( - is NASDAQ s homepage. Founded in in 1971, is the largest electronic stock market. The web site allows students to compare companies and chart stock performance. New York Stock Exchange ( - is the New York Stock Exchange s homepage. The NYSE is an auction market where buyers and sellers compete for the best possible stock prices. Visit MarkeTrac on their Web site to experience a virtual trading floor. American Stock Exchange ( - is the American stock Exchanges web site. Like the NYSE, Amex is also an auction market. Visit their Web site for their business Word of the Day. EDGAR Database of Corporate Information ( - is the Electronic Data Gathering, Analysis, and Retrieval system, offers real-time filings and other company information for publicly traded companies. US Treasury Office of Financial Education ( - raises awareness about the need for financial education and provides information about federal financial education resources. Hoover s Online ( - is a great source for finding subsidiaries or discovering whether a company is privately held or publicly owned. It also provides students short, easy-to-read fact sheets about companies as well and company news and financials. MyMoney.gov ( - is the US government s website dedicated to teaching all Americans the basics about financial education. 39

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41 Managing Student Portfolios In addition to providing you with tutorials and technical guides, the Teacher Support Center provides you with tools for managing and tracking your students portfolios. Through Manage Student Portfolios, you have complete access to each of your teams portfolios. You may view all of their reporting pages (Account Summary, Account Holdings, Transaction History, Transaction Notes, etc.) A troubleshooting handout with responses to teacher FAQs and access to an automated Help Desk facility are also available in Manage Student Portfolios. 41

42 Rankings There are two types of rankings in the SMG program: portfolio equity and percent return. In the portfolio equity rankings, teams are ranked based on the total equity of their portfolios. The team with the highest equity at the end of the trading sessions is recognized as the winner. In percent return rankings, teams are ranked based on their percent of growth as compared to Standard and Poor s 500 Index. This index is made up of 500 large companies representing major sectors of the American economy. You can track the ranking of your teams in your by clicking View Rankings and Portfolios in the Manage Student Portfolios section of the Teacher Support Center. Student may check their progress by clicking the Rankings icon at the bottom of their portfolio Welcome page. Changing Passwords Like your teams you may not change the IDs you were assigned. However, you may change your password. SMG IDs and passwords are case sensitive and must be typed as they were initially assigned or entered (if you changed their password). You may change your passwords at any time. Your new password is active immediately. If you have forgotten your password, you may contact your SMG Coordinator for it. Troubleshooting Advances in web-based technologies and a commitment to customer service and support provide teachers and students with the best possible learning experience. If you experience difficulties logging on, receiving announcements and/or messages, or accessing the SMG Web site, you have a number of features to help you. You are encouraged to read the Troubleshooting and Hot Tips handouts that follow. Help Desk The Help Desk link under Manage Student Portfolios in the Teacher Support Center, provides you with an electronic Help form. The form requires you to provide information specific to the team experiencing difficulty. This information expedites the process of resolving the issue the team may be experiencing. Participation Certificates It is important to recognize student achievement. A student does not have to have won one of the SMG program s local or national competitions to be considered successful. We encourage you to print out the Participation Certificate available in Manage Student Portfolios in acknowledgement of your students progress in the SMG prgoram. 42

43 Troubleshooting To provide you and your students with the best possible learning experience, The Stock Market Game (SMG) utilizes some of the latest and Web technology. However, this technology is not infallible. You may experience difficulties receiving announcements and messages from the SMG program or accessing the SMG Web site. This troubleshooting document was created to assist you with resolving these potential issues. Visit the Teacher Support Center as soon as you receive your SMG Advisor ID and password. Use the teaching materials in the Teacher Support Center to create a binder of ideas to use in emergencies where you and your students do not have access to the Internet or the SMG Web site. IMPORTANT! Before attempting to resolve any technical issues on your own, it is strongly recommended that you contact your SMG Coordinator and your school computer network administrator. My Teams and I Cannot Access the SMG Homepage to Login In some instances, access to certain Internet sites are blocked to prevent students from viewing inappropriate content. As a result, some legitimate sites are grouped together with sites containing inappropriate content. Because the SMG site contains the word Game it might be blocked by your school or school district. Contact your school network administrator or computer technician to remedy this situation. If you receive an error message stating that the DNS entry is not known or the server is unavailable, please try entering the following in your browser s address bar: My Teams and I Cannot Log In to either the Portfolios or Teacher Support Center IDs and passwords for the SMG program are case sensitive and must be entered as they were assigned. If you or your students have changed your passwords and have forgotten what they are, ask your SMG Coordinator to send you an updated set of passwords. Some Pages of the SMG Site will Not Display The SMG program s Teacher Support Center and online team portfolio utilize some of the latest Web technology. For the best possible experience of both SMG elements, make sure you have the latest version of your Web browser installed. Consult your browser s Help section for information about checking your browser version and how to update it, if necessary. Both the Teacher Support Center and the online team portfolio are best viewed with Internet Explorer. Some Pages of the SMG Site Display Outdated Information The pages of the SMG program s Teacher Support Center and online team portfolio are consistently updated with new information. This is particularly true for the pages of the team portfolio. if you receive complaints from teams regarding old or inaccurate information being displayed when they logon to their portfolios, please instruct them to clear the browser s cache. Instructions for clearing the cache can usually be found in the browser s Help section. There Are Terms in SMG That My Students Do Not Recognize SMG is an educational program. Learning investment terms like Total Equity, Buy Margin Requirement, and Minimum Maintenance, is part of successfully participating in the program. The team portfolios provides many of the same functions as a commercial trading portfolio and uses similar terminology. Please encourage your students to make full use of their portfolio Help sections for definitions of unfamiliar words and an explanation of unfamiliar concepts. Students may access the Help section by clicking on the yellow glowing 43

44 question mark on their blue Trading tab of the online portfolio. I am Not Receiving SMG Messages Many schools and school districts have implemented spam filtering software to prevent spam and fraudulent messages from cluttering your inbox. As a result legitimate messages from the SMG program, like the one containing your teams IDs and passwords, are blocked and automatically deleted. If you believe this is happening to you, please contact your SMG Coordinator immediately. You may also ask your school network administrator or computer technician to allow messages from: or rtpussxdnsb03.raleigh.mebs.ihost.com or rtpussxdnsb04.raleigh.mebs.ihost.com. However, the first thing you should do is contact your SMG Coordinator. When I Enter or Submit Information, I Receive a Message that My Session Has Timed Out As a security concern, both the SMG team portfolio and the Teacher Support Center automatically logs users off after 15 minutes of inactivity. If this occurs, instruct your teams to check their Pending Transactions page for the trade they were entering before re-entering a trade. My Teams Are Logged Into Their Portfolios Where Should They Begin? Once teams are logged into their portfolios, they should first check their Team Information box to ensure the information is correct. Next, they should check their Account Summary to make sure their Cash Balance is correct. If there is no cash in the Cash Balance, it may be that their balances have not yet been set up. They should check back the following day. If they have confirmed that their team information and cash balance are correct, encourage them to surf through the site to familiarize themselves with the pages. They should also be encouraged to spend some time in the Help sections of each of the pages and in the Mutual Funds Education Center. 44 My Students Trades Are Not Appearing in Their Portfolios Check Transaction Notes for descriptions of the trades entered. If a trade your students entered did not process as planned, the Description column of Transaction Notes should provide an explanation of what occurred. Please also ask the team in question to clear their browser s cache and try viewing the page again. Teams should also check Transaction History for possible corporate actions (dividends, mergers, name changes, stock splits, etc.) that may have impacted their portfolio. I Am Logged Into the Teacher Support Center, Where Do I Begin? The best place to start in the Teacher Support Center is the In the Classroom section. Click either the purple tab or section heading named In the Classroom to access its main page. You may also chose to surf the site by clicking on the tabs or the section headings for detailed descriptions of what is available to you in each part of the site. When I Click a Link in the Teacher Support Center Nothing Happens The Teacher Support Center employs pop-ups to provide teachers with fast and efficient access to the site s content and function. If you click a link and it seems that nothing is occuring, try disabling your browser s pop-up blocker. If you have multiple desktop windows open, try searching under them. Where Do I Get Additional Help? If you need additional assistance, please do not hesitate to contact your SMG Coordinator. You may contact your SMG Coordinator by logging into your Teacher Support Center and clicking the Help Desk link under Manage Student Portfolios. You may also contact your SMG Coordinator by visiting clicking How to Register, and making the appropriate selections for your local SMG program.

45 HOT TIPS Hot Tip 1: Make sure you have the correct version Web browser. You may experience difficulties running the various functions of The Stock Market Game site on older browsers. It is recommended that you upgrade to the latest version of Internet Explorer or Netscape Communicator. The Stock Market Game is best viewed with Internet Explorer. Hot Tip 2: Passwords are case sensitive. Your Login ID is your Username. To access your trading portfolio, please go to The Stock Market Game homepage ( and enter your username and password in the designated fields and click submit. Please note that usernames and passwords are case sensitive and must be entered exactly as they were assigned. Passwords can be changed by clicking the appropriate icon on the Welcome page of the Team Portfolio. Hot Tip 3: The Stock Market Game has a built in logoff function. To reduce the risk of having others access your portfolio The Stock Market Game portfolio site automatically logs you off after 15 minutes of inactivity. If your portfolio has been inactive for 15 minutes or longer you will be automatically logged off. Please return to The Stock Market Game homepage and re-enter your username and password to access your portfolio. Hot Tip 4: Help Menus are available in the portfolio pages. Hot Tip 5: Trades entered after 4:00pm EST. The market is open for trading Monday through Friday from 9:30am to 4:00pm EST. Trades made after the close of market are given the next business day s opening price. Hot Tip 6: Validate Ticker on the Enter a Trade page. When you wish to enter a trade and are unsure if you have the company s correct ticker symbol, type the ticker symbol into the appropriate field and click on the Validate Ticker link to the left. This will bring up a pop-up window with the name of the company and its stock s price. Hot Tip 7: Transaction Notes is a good place to start. Transaction Notes provides descriptions of each trade that was entered. These descriptions include errors that may have occurred causing a trade not to be processed. If your Account Holdings profile seems inaccurate, Transaction Notes is the first place to look when determining what has occurred. Hot Tip 8: Clear your browser s cache. Your browser creates temporary files of the web pages you have visited in its cache. These cached pages may interfere with your accessing your Stock Market Game portfolio. It is a good idea to clear your browser s cache every once in a while to avoid possible complications. Refer to your browser s Help Menu for assistance with clearing its cache. From each portfolio page, you can go to on-line help screens by clicking on the HELP icon (the question mark) at the top of the page. There are help screens for each section of the portfolio. 45

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49 In the Classroom In the Classroom is divided into two sections. The first section, Our Philosophy, describes the structure of the lessons and activities, outlining the design and the philosophy influencing that design. SMG is an interactive learning experience. Units, lessons and activities are designed to challenge students with from a range of experiences and knowledge about saving and investing. The unit and lesson design allows students to engage in more than one session in a school year or through the course of several school years, continuously improving their long term investing capability. Ready to Plan, the second section provides the teacher access to lessons, reproducible activity sheets, standards, assessments and other resources which will enable you to enhance this experience for your students. This section provides a set of core lessons, those essential for successful participation in The SMG. The teacher background vocabulary and learning activities needed for each of these lessons is provided for each core topic. Teachers can use one or more of the activities allowing for maximum flexibility with minimum planning time. 49

50 Our Philosophy Curriculum Design The In the Classroom section of the Teacher Support Center is where you access classroom lessons and teaching materials. Lessons and teaching materials are organized into four SMG units: Before You Invest: The introduction of necessary background material for your students first trades. Selecting Your Investments: Additional background information your students will need as they begin entering trades in their portfolios). Tracking Your Investments: Information on evaluating stocks and making buy and sell decisions. At the End of the Trading Session: The application of the critical thinking skills learned through SMG. Each SMG unit contains lessons and materials organized into mastery levels. Mastery levels are distinct levels of investment knowledge. These levels are: Novice: First exposure to or limited knowledge of investing and The Stock Market Game Apprentice: Basic knowledge of investing and The Stock Market Game Master: Proficient knowledge of investing and The Stock Market Game Grand Master: Proficient knowledge of investing and The Stock Market Game and the ability to apply, synthesize, and evaluate that knowledge in new situations Each grade has Novice through Grand Master level lessons and activities. Lessons are organized by the following grade ranges: Elementary: Grades 4-5 Middle School: Grades 6-8 High School: Grades 9-12 Post Secondary: Grades 12 and up Lessons identified as Core lessons teach fundamental investment topics. Topics include: What is a Company? What is a Stock? What is Risk? and What is a Mutual Fund? We have identified 12 core topics, we feel are necessary for successful participation in the SMG program. All lessons, core and non-core, provide you with a background information on the topic being taught (Teacher Background) and ways for evaluating student learning (Assessments). Concepts Defined Below are terms that you should know to take full advantage of the features the Teacher Support Center offers. Activities are designed to provide teachers with a concrete means for carrying out the procedures suggested in the lesson. Aim in the lesson is usually a thought-provoking question to engage the students. Assessment is a suggested method for evaluating student outcomes. 50

51 Core lessons cover the topics essential for successful participation in the SMG program. There are 12 core lessons. Enrichment Activities are additional work to reinforce classroom instruction. Mastery Level refers to the skill level or the level of familiarity a student has with the investment concept being taught. Materials provides a list of items needed to implement the lesson. Performance Objectives are outcome-based measurements meant to assess whether the aim of the lesson has been accomplished. Procedure is an approach to teaching the lesson content that includes suggested questions and effective means for employing the activities included as part of the lesson. Projects enrich the students SMG experience. Projects are grouped as Overarching (designed to take students through an extended activity that may last two months or longer), Unit (designed to take students through an extended activity that reinforces the topics of a specific SMG unit), and Topic (designed to take students through an extended activity that reinforces a specific investment topic).. Springboard Activity presents a suggested method for engaging students in the lesson. Subject areas covered in the lesson include combinations of Social Studies, Economics, Mathematics, Information Technology, and Language Arts. Teacher Background provides a brief description of the investment concept covered in the lesson. Topics identify the investment concept being taught. Topics are organized by Unit. Units organize The Stock Market Game. There are four Stock Market Game units: Unit I, Before you Invest; Unit II, Selecting Your Investments; Unit III, Tracking Your Investments; and Unit IV, At the End of the Trading Session. Ready to Plan Lesson Sequence SMG lessons are sequenced on each of the three grade levels: upper elementary, middle school and high school. While the lessons are designed to be used independently of one another, it is recommended that SMG Advisors who are new to the program or who have not had classes registered in the SMG program in a long while follow the suggested sequence. Core lessons are lessons that address a specific investment topic necessary for successful participation in the SMG 51

52 program. Core lessons are repeated at each grade level. However, the lessons and activities vary based on anticipated skill level and understanding. The core lesson sequence on each grade level is as follows: 1. What is a Company? 2. What is a Stock? 3. Identifying Ticker Symbols and Interpreting Stock Quotes 4. What is Risk? 5. How Does Money Grow Over Time? 6. Dividends and Earnings 7. What is an Exchange/Market? 8. What is Diversification? 9. What is a Mutual Fund? 10. What Causes Stock prices to Change? 11. Buy, Sell, or Hold? 12. How Successful Was My Investment Strategy? Lessons & Activities The Lessons and Activities section allows SMG Advisors to quickly locate lessons by topic or key word. Each lesson is designed to provide the necessary content background and vocabulary for teaching the lesson. A range of procedures differing in difficulty levels, assessment and application activities are also provided to determine student performance. In addition to the core lessons described in Lesson Sequence, supplemental or non-core lessons are available in Lessons & Activities. Non-core lessons allow SMG Advisors to further customize the SMG experience for their students. These lessons explain aspects of saving and investing in greater depth than the core lessons. Each lesson is designed to encourage flexile planning to meet the needs of your students. A sample high school lesson, Getting Started in The Stock Market Game follows. 52

53 Suggested Grade & Mastery Level High school - all levels Teacher Background Getting Started in The Stock Market Game Students in The Stock Market Game In The Stock Market Game (SMG) teams of students work together to create and manage a virtual investment portfolio of real world stocks and mutual funds. Each team researches and evaluates companies in which to invest. Teams must also manage their investments by deciding whether to buy, sell, or hold the funds and stocks in the portfolio they have created. The research they use to make their investment decisions is easily accessible through the Investor Research and News Update links in their online portfolios. Additional research and news is available at the Web sites listed in the Outside Links section of their portfolio. Support and additional education resources are available by clicking the yellow question mark on the corner of their portfolio s blue Trading tab and through the links immediately below their Team Information box on their portfolio s Welcome page: Path to Investing, Dictionary of Financial Terms, and Rules of the Game. In addition to working in the online portfolio and researching their investments, each student is encouraged to keep a journal. The journal can contain a combination of minutes from a team meeting, research notes, and reflective entries. Teachers in The Stock Market Game The confirmation message you receive when you have successfully registered for The Stock Market Game (SMG) contains your SMG Advisor ID and password. Visit The Stock Market Game homepage ( and login for access to the Teacher Support Center. The Teacher Support Center provides you with a library of lessons, activities, tutorials, and other tools for implementing the SMG program with your students. It is organized into three main sections: Understanding SMG, Managing Students Portfolios, and In the Classroom. The SMG program s teaching materials support each student s financial literacy development by providing you with lessons differentiated by knowledge and skill level. The program also provides you with rubrics and pre/post tests to use to assess your students progress. Each lesson also has an assessment component. Teaching The Stock Market Game This introductory lesson is designed to help students understand how trades are made, how investment strategies are developed and how stock purchase prices are determined in The Stock Market Game. Vocabulary The Stock Market Game (SMG) - An investment education program with applications for teaching core academic subjects such as math, English Language Arts, economics, social studies, technology, and business. SMG Journal - Student journal to record decision-making process and summarize important information as they play the game. SMG Portfolio - Record of investments and their current value, history of investments with prices of sales, cash on hand, and money borrowed. 53

54 Teacher Support Center Teacher reference and resource center for implementing the SMG program in the classroom. Ticker Symbol - One to five character symbol used to represent a company when you are buying or selling stock. Trade - Procedure for buying or selling a stock in a group s SMG portfolio. Performance Objectives Students will be able to: Understand the purpose of the stock market game and how a team can be successful. Log on to their accounts, access research information, and make a first purchase of a stock and/ or mutual fund. Accurately estimate the cost of purchasing a share of stock, including the fee. Reach consensus as a group about their first investment decision. Set up and begin to use student SMG Journals. Evaluate each team s first purchase decision based on accessing key information through their account. Subject Areas Math, Economics, Social Studies, Business Education, and English Materials SMG IDs and passwords (These will have been sent to your by your SMG coordinator after your registration has been processed.) SMG Handouts: Enter the SMG and Trading the Stock Market Way Internet Access Notebook or computer space for student writing Template for Student Journal Springboard Activity Arrange students in their SMG teams and explain that each group is going to be given a virtual check for $100,000 to spend the money on whatever products or services the team agrees want to purchase. ASK How you will spend the money? Make a list and total your expenditures. What group process will your group use to decide how to spend the money. Have each SMG team present their list to the class and describe their decision-making process. Once all the teams have reported allow the teams to meet to discuss how they might change their list or decision-making process. Procedure Display the Welcome screen of The Stock Market Game homepage ( on an overhead or big screen as an orientation for the student. Explain that each team will be given a virtual $100,000 cash account to invest in stocks and mutual funds the goal of which is to increase the value of the portfolio. Distribute and review the handout Enter the SMG and show students where to sign on using their SMG team IDs and passwords. If you wish, you may show your students how to change their passwords using the CHANGE PASSWORD section. They should record their new password in their journals or in another safe place, so they will not forget their passwords. 54

55 Have each team review their list of how they wanted to spend their $100,000 as well as their decisionmaking process. Tell each group that they will now be using that same process to make a decision about their first portfolio purchase. Have the students decide on a company that sells something from the list they created for the Springboard Activity or a company which sells things they might actually purchase such as Apple, which sells the Ipod, or General Motors which sells Hummers. Students can look up the ticker symbol for their company in the Investor Research section of their online SMG portfolio. Once they have located the ticker symbol for the company they wish to invest in, have them read Rules of the Game under the Team Information section. Ask How many shares must your team s initial purchase be? (100) What percentage broker s fee with you be charged for each purchase? (2%) Then have students calculate the estimated price they will pay for 100 shares of their chosen stock. They should use this formula: (# of shares) x (price per share) = (cost of stock) +.02 x (cost of stock) = (final stock cost) Be sure to tell the students that the price of the stock may vary a bit since the SMG may use a selling price later in the day than when the students researched the price. You also need to explain that the.02 represents the cost charged by the brokerage account to perform the purchase. Thus this will represent an estimated cost of the stock. Students can now execute purchase of the stock. Distribute the Trading the Stock Market Game Way handout and have your students follow the process to complete their purchase, starting with the Enter A Trade link in the Trading section of the site. Inform the students that for now they will only be entering a Buy and they should ignore directions for Short Sell and Short Cover as well as the Limit options for now. Explain that they will be making more purchases and trades as they learn more about different companies, stocks and mutual funds over the length of the session Assessment When the class meets next have students log on and survey their Account Summary, Account Holdings, and Gains and Losses. They now will be ready to complete their first SMG Journal to record and reflect on what took place. Their SMG Journals might look something like: 55

56 Enrichment Activity Novice and Apprentice Levels: Using the Investor Research, students could research one mutual fund to invest in. Information on how to teach about Mutual Funds is available in the Teacher Support Center. They then would complete a Buy for one mutual fund for their portfolio. Student teams would then record their reaction to their decision-making process in their SMG Journal, as they did with their initial stock purchase. Students could also write a comparison between investing in a stock and investing in a mutual fund. Master and Grandmaster Levels: Students can now build on their experience in buying one stock to compare buying individual stocks with buying a mutual fund. Information on how to teach about mutual funds is available in the Teacher Support Center. Students can access information about different mutual funds by going to Investor Research. Students might want to create an experiment where they compare the results of investing in one mutual fund over a week to investing in one stock from that mutual fund. At the end of the week, students should record their results in their SMG journals and also decide at that time if they want to buy shares of that stock or mutual fund. Students will note that there is a special Mutual Fund section of their portfolio. 56

57 ENTER THE SMG On the right side of THE STOCK MARKET GAME home page ( you will find a login area asking you to enter your Team ID (also called User Name) and Password. Once you have entered this information, click Submit. If you have entered the requested information correctly, you will be taken to the Welcome page. On the right hand side of this page, is a table titled, Team Information. Please check the Advisor, Team ID, School, and Region categories for accuracy -- especially the Region. If the information is NOT correct, notify your SMG coordinator immediately. NOTE: For security, The SMG site automatically logs you off after 15 minutes of NOTE: The Welcome page you see when entering a student ID and password differs from the page you see when you enter with an Advisor ID and password. At the bottom of your screen are four icons (you may have to scroll down to see them): RANKINGS list active team portfolios based on either equity or percent change compared to the Standard & Poor s Index. Teams may view themselves against teams in their same Region or against all of the teams registered in their local SMG Program. OUTSIDE LINKS directs SMG teams to several commercial and exchange investment research web sites that enhance the SMG Program. Links include the New York Stock Exchange homepage, NASDAQ, and Hoovers.com. The LEARNING RESOURCE CENTER is not available to student team participants. The link appears in portfolios associated with 3-week demonstration/promotional trading sessions and adult/college/ teacher participants. Click on CHANGE PASSWORD to customize the password assigned to you. It is recommended that teams change their passwords to something easy to remember. They will need their passwords to confirm all trades. Please do not give your Team ID and password to anyone whom you do not wish to have access to your portfolio. 57

58 58 THE MAIN MENU ACCOUNT SUMMARY provides you with a financial summary of your portfolio. Important information such as total equity of the portfolio and buying power can be found here. ACCOUNT HOLDINGS is a list of all open positions in a portfolio. It includes both Long Positions (stocks that are bought) and Short Positions (stocks that are short sold). It lists the ticker, number of shares, the original cost per share, the net cost (after broker fees are taken out), the current price, the current value (number of shares times current price) and the unrealized gain or loss with the percent gain or loss. TRANSACTION HISTORY provides you with a list of all processed trades. You are shown the type of trade, number of shares, ticker, date, cost per share, net amount of transaction (including broker fees), and the amount of the broker fees. Other types of transactions that are included are interest paid at 5% of cash balances, dividends paid on individual stocks (if paid during the time the stocks are held), and interest paid on margin loans at 7%. GAINS AND LOSSES is a list of all realized gains or losses from the sale or short cover of stocks. Gains (or losses) only become realized when a stock position is closed, either sold or short covered. Interest received or paid and dividends received are also considered realized gains or losses. Any stock that is still held in your portfolio will not be listed on this page; gains and losses for stocks still held in the portfolio are unrealized. INVESTOR RESEARCH is a starting point for teams to research stocks, look up ticker symbols, and get updated quotes (approximately 20 minute delay) on stocks prices. ENTER A TRADE is where you complete all of your buy/sell transactions. Please note that as a security measure, you are automatically logged out after 15 minutes of inactivity. If you should happen to be logged out, simply return to THE STOCK MARKET GAME home page and reenter your username/id and password. PENDING TRANSATIONS consists of all trades that have not yet been processed. Trades entered before the markets close will appear in Account Holdings the next day. Trades entered after the markets close (4 pm, Eastern time) will receive the following day s closing prices and will continue to appear in Pending Transactions until the following day. The delete option to the right of each pending transaction may be used only before the markets close on the day the closing prices are to be obtained. TRANSACTION NOTES includes a list of all trades that were attempted, whether or not they were executed. If not executed, an error message will appear to the right of the listing. It is important to look in both Transaction History and Transaction Notes for a complete history of all trading activity. AMERICA S INDICES is a list of several major indices like the NASDAQ Composite Index, the NYSE Composite Index, the S&P 500 Index, etc., and is updated during the day with an approximate 20-minute delay. NEWS UPDATE provides access to up-to-date financial industry news and announcements. Access news by clicking the News Update link on each page of the team portfolio except the Welcome page. HELP pages are available in each section of the team portfolio except the Welcome page. Click the question mark icon on the blue trading tab for access.

59 Trading The Stock Market Game Way Before you begin buying and selling in The Stock Market Game TM, please take a moment to explore the elements involved in making a trade. It is a good idea to visit the HELP section in Enter a Trade. There are Help sections throughout your Stock Market Game portfolio. You can visit these sections by clicking on the glowing question mark Decide on the kind of trade you want to make and click in the appropriate circle. Buy and Sell are common and straightforward transactions. Short Sell and Short Cover require a little more explanation. A short sell occurs when stock is borrowed and sold with the intention of buying it back at a lower price. Usually a short sell stock is not kept for a long period of time. When the stock is bought back and returned to the lender the transaction is called a short cover. Enter the Ticker Symbol (1 to 5 characters depending on the exchange). If you do not know the ticker symbol, you can click on Ticker Symbol to the left of the box to look it up. If you want to be sure you have entered the correct symbol, click Validate Ticker and a new window will appear with the company name and a 20-minute time delayed price quote. By default, your Order Type selection is set to Market. This means your transaction is subject to the current day s closing price, if you are participating in the end-of-day version. In the Intraday or real time version, you would receive the price at the moment the trade was recorded. The markets close at 4:00PM Eastern time. If you trade after the markets close in the end-of-day version, you will receive the next day s closing price. In the Intraday or real time version, you receive the next day s opening price. If you select Market, please leave the Limit Price blank. The other Order Type option is Limit. Choosing this option will allow you to specify the highest price you will accept on a Buy or Short Cover. Limit also allows you to specify the lowest price you will accept on a Sell or Short Sell. The price limit must be entered as a decimal with no dollar sign

60 4. 5. Enter the Number of Shares you wish to trade. The minimum number allowed for Buy orders is 100. If you enter a number smaller than 100, you will be prompted to enter an amount of 100 or more. There is no minimum on Sell orders. Click on Clear Values to reset your transaction and start over or click Preview Trade to view your transaction and proceed with submitting it When you click on Preview Trade, you are shown the transaction you just entered. Review it carefully. If it is correct, enter your password in the appropriate field and click Confirm Trade. If it is not correct, select Edit Trade to re-renter your trade. 6. Your transaction will not be processed unless you click Confirm Trade. Upon confirming your trade, a new screen appears with a Trade Order Confirmation number and the option to view Pending Transactions or Enter Another Trade. Select view Pending Transactions to view the trade you have just entered. Select Enter Another Trade to enter another transaction. You may also select one of the available functions from the blue Trading tab at the top of the screen. 60

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63 Projects Enrich your students SMG experience by engaging them in an SMG project. Projects can be completed over the course of the SMG trading session or at the end. They are designed to extend and apply the knowledge and skills students have acquired through The Stock Market Game. You may select from three types of projects: Overarching, Unit Based, and Topic Based. Assessments Each SMG lesson has an Application and Assessment piece written into it. To further assist you in assessing the progress of your students, the SMG program provides you with several rubrics, pre-tests, and post tests. Pre and post tests are organized by their SMG unit (Before You Invest, Selecting Your Investment, and Tracking Your Investment). Rubrics are organized by task, whether it is a single student or a team being assessed, and whether it is a self assessment or a teacher assessment. Standards The Stock Market Game s core lessons are correlated to national and state standards in business education, economics, English Language Arts, family consumer sciences, mathematics, social studies, and technology. For your convenience standards correlations are presented in a matrix format. Click the asterick above the standard code to access a description of the standard. Click the lesson name to display the lesson. Publications In addition to lesson plans, the SMG program provides you with a variety of supplemental materials to use with your students. These publications contain additional lessons and activities, background information, and current events tie-ins. In the News and StockTalk, the SMG program s newsletters, are two examples of the supplemental materials available to you. Utilizing the SMG program s supplemental materials with your students helps to enrich their SMG experience. Investor Background The goal of the Investor Background section is to provide you with a brief understanding of the stock market, its founding and its role in the US economy. The Investor Background section of the Teacher Support Center is divided into four main links: History of the Stock Market Mechanics of the Stock Market Securities Dictionary of Finance 63

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65 Risk & Return by Bill Dickneider P B Suppose you invest $500 in stocks, and one year later its value has grown to $530 because of higher stock prices and dividends. What is the annual percentage return on your investment? T he first thing Mike does when he gets home from school is find something to eat. One afternoon he was thinking of things that go together like the peanut butter and jelly he was using to make a sandwich. Let s see, he said to himself, salt and pepper, chips and salsa What about risk and return? asked a strange voice. Food for Thought Mike couldn t believe his eyes. There was the jar of peanut butter with eyes, arms, and legs. PB at your service, it said. I m here to fill your brain as well as your stomach. I d like to explain why risk and return go together like peanut butter and jelly. I must be dreaming, thought Mike. Let me explain, said PB. A return is what you earn on an investment. Let s say you invest $100, which then grows to $110 after one year. You would have earned $10, which is a yearly return of 10% on your $100 investment. What about risk? asked Mike. Risk is the likelihood of losing money, explained PB. If you want a return on your investment, you ve got to accept some risk. Aren t there investments without risks? asked Mike. What if I put my money under my mattress? You re not really investing, explained PB, because you re not putting your money in anything that can give you a return. But even hiding money under your mattress is risky. Someone might steal it, or a fire could destroy it. And inflation might shrink its buying power by pushing up the prices of what you eventually buy with your money. I hadn t thought of that, said Mike. If I m going to take risks with my money, I might as well earn a return. Think of investing as accepting risk so your savings will have the potential to earn money. The higher the potential return, the more risk you re likely to have. So all investments have some risk, concluded Mike. Securities Industry Association Vol. 18, No. 2 April 10,

66 Exactly! Take a look at this, said PB, while removing its label. The other side of my label describes different types of investments. Mike carefully read the label. (See box at right.) I can see that before I invest, I ll have to decide how much risk I m willing to accept, he said. Right. And that depends on your goals for saving and investing, explained PB. If you ll want the money in the near future, you won t want to take big risks with it. But if you re saving over a long period of time, you can accept bigger risks. And aim for a bigger return? asked Mike. Right. Here s an illustration, said PB, pointing to a chart that was uncovered when PB removed its label. Highest Lowest Average Stocks From 1990 Highest, Lowest, & Average Yearly Returns of Stocks, Bonds & Cash 38% -22% 12% Bonds 18% 8% -3% +0.4% 8% to 2005 Cash 4% The highest return that stocks achieved in any year from 1990 to 2005 was 38%. The lowest yearly return of stocks during that time was minus 22%. Stocks' average return was 12%. What were the highest, lowest, and average returns of bonds and cash? Stock returns are for S&P 500 ( Bond returns are for Lehman Brothers Aggregate Bond Index ( Cash returns are average money market rates ( VGApp/hnw/FundsHistoricalReturns?FundId=0030&FundIntExt=INT). The chart compares the risk and return of stocks, bonds, and cash from 1990 through 2005, continued PB. Which type of investment had the highest return during any year from 1990 to 2005? Here's what Mike read on Cash (Low risk and potential return) "Cash-like investments that can be quickly and easily exchanged for cash whenever an investor chooses. Examples are bank savings accounts and money market mutual funds. Returns of cash investments depend on the periodic interest they pay. These returns are relatively stable from year to year. Bonds (Medium risk and potential return) IOUs that a company or government sells when it borrows money. Borrowers are required to pay interest on bonds, although some companies might fail and be unable to do so. Bond investors wait longer than cash investors to get their PB's Label money back. Returns depend on the interest rate bonds pay and any changes in bond prices. Bond returns usually rise and fall more than cash returns. Bond mutual funds enable people to invest in bonds while also reducing risk through diversification. Stocks (High risk and potential return) Shares of ownership in a company. Companies don t have to pay back the money investors put into stocks. Stock returns depend on any dividends companies pay and on changes in stock prices. Stock returns jump up and down much more than the returns of bonds or cash. Stock mutual funds and exchange traded funds enable people to invest in stocks while also reducing risk through diversification. Stocks, answered Mike. They had a return of 38% in one year. Which type of investment had the lowest return in any year? asked PB. Stocks again, replied Mike. They lost 22% in one year. Stock returns jump up and down much more than those of bonds or cash, said PB, so I call them chunky. Cash returns are the most stable, so I call them smooth. So stocks are the riskiest, and cash is the safest, concluded Mike. Bonds are somewhere in between. I guess they re a mix of chunky and smooth. That s right, agreed PB. But notice what happens in the long term if an investment is held for many years. Which type of investment had the highest average return over the entire period of 15 years? Stocks, observed Mike. Now I see what you mean. Stocks are the riskiest in the short term, but they also offer the highest potential return over the long haul. If I want a higher potential return, I ll have to accept more risk. Like I said, smiled PB. Risk and return go together like peanut butter and jelly. Write Now Pick one of the following and write a paragraph to explain your answer. Suppose you re saving for something in the next year or so. Would you invest in stocks, bonds, or cash? Why? Suppose you re saving for something way off in the future, such as retirement. Would you invest in stocks, bonds, or cash? Why? StockTalk promotes an understanding of investment and stock market terms through demonstration in a fictional setting. StockTalk is published by the Foundation for Investor Education for The Stock Market Game Program. Copyright 2006 Foundation for Investor Education. 66

67 Vol. 31 No. 1 September 11, 2006 A Bigger, Better Board by Bill Dickneider Here s a quiz you might want to try on your friends. Which of the following best describes the Big Board? A) A government agency that monitors companies earnings reports. B) The New York Stock Exchange. C) Pixar s forthcoming animated movie about a talking stock. D) A nickname for the Federal Reserve. The answer is B, the New York Stock Exchange. The New York Stock Exchange (NYSE) is the oldest stock market in America. Its roots trace back to 1792, when a group of brokers began auctioning stocks under a buttonwood tree in New York City. The auction market evolved over the next 200 years into a sophisticated trading floor on Wall Street. Today it lists nearly 2,700 companies worth a total of more than $20 trillion. On an average day it trades about 1.8 billion shares, whose market value equals nearly $70 billion. 1 No wonder it s been nicknamed the Big Board. Since its inception, the NYSE has been a private company owned by its members. In March 2006, this changed. The NYSE merged with an electronic stock market named Archipelago Holdings to form the NYSE Group. As a result of the merger, the NYSE went public and now trades as the NYSE Group under the stock symbol NYX. Percentage Change in Stock Prices of NYSE Group and Euronext N.V. Aug. 12, 2004 Aug. 11, 2006 Cumulative Change March 8 600% NYSE Merges into Archipelago & company becomes NYSE Group. 400% 200% Aug. 12 Archipelago's stock begins trading NYX Euronext 0% Sources: Euronext N.V., Fiance!Yahoo, Auction Action The Big Board s trading floor in New York City is an important part of the new company. It hosts an auction market not unlike the one occurring under the buttonwood tree many years before. Orders arrive on the trading floor via a computerized system. The orders are then routed to one of 20 trading posts, each with a special- ist who oversees the auction of 100 or more stocks assigned to that post. The trading crowd that gathers at each post consists of brokers representing buyers and sellers. These brokers shout out the bid prices buyers are willing to pay and the ask prices sellers are willing to accept. The result is an auction market. Brokers match the bid and ask prices of buyers and sellers and complete the trade at the matched price. One of the advantages of the auction market is its potential to provide better prices for investors. Price improvement can occur because the market collects offers from buyers and sellers all over the world and centralizes them in one location. Specialists can then search among all these offers to find the best price possible for buyers and sellers of a particular stock. Another advantage is a smoother ride for stock prices. Specialists are responsible for providing a fair and orderly market, so they sometimes buy or sell stocks on their own account to fill orders that would otherwise lack enough 67

68 buyers or sellers. By supplementing demand or supply in these cases, specialists can smooth out the daily ups and downs of stock prices. These actions also help investors who want to trade infrequently-traded stocks that may lack enough buyers or sellers to complete a particular order. Electronic Tonic Electronic markets don t offer the personal matchmaking of the Big Board s exchange floor. But they are faster, with most trades taking well under a second. Being faster and simpler, the computerized collection and matching of orders is usually less costly. The greater speed and lower cost are very important to mutual funds and other large institutional traders. With their sophisticated computers and large and frequent orders, institutional traders usually prefer the lower costs and lightning-fast trades of an electronic stock market. 2 This preference for speed and lower cost has become more important in recent years, because investors today own a larger share of their stocks indirectly through mutual funds, exchange-traded funds, pension funds, and other large institutions. As investors have increased their stockholdings through these institutions, electronic trading has grown rapidly. Hi, Hybrid! The Big Board has taken notice of the growing electronic trading and has begun to make changes of its own. One of the biggest is the introduction of its Hybrid Market. 3 The Hybrid Market has two separate parts. One is the trading floor s auction market, and the other is an electronic trading system known as Direct+. This automated system now accounts for more than 15 percent of all daily trades, or more than 250 million shares a day. 4 But these numbers will surely rise as the Hybrid Market increases the capacity and speed of Direct +. Investors who want the quickest possible trades can have Direct+ complete their orders in less than a second. Other investors seeking the best possible prices can direct their orders to the NYSE s trading floor. Here, the personal matchmaking of brokers and specialists offers the chance of price improvement. Next Up As the Hybrid Market improves both the auction market s trading floor and the electronic trading of Direct+, it will give investors more choice, faster trades, and better prices. But the Hybrid Market isn t the only change the NYSE Group is making. Looking to expand its global reach, the NYSE Group has agreed to buy Euronext NV, a Pan-European stock exchange that includes Paris, Lisbon, Amsterdam, and Brussels. 5 If approved by stockholders and government regulators, the merger would extend the NYSE Group s market across the Atlantic. The new company, NYSE Euronext, would become the world s largest stock market, with daily trading that could top $100 billion and listed companies worth over $26 trillion. 6 Our market will be multi-product, multi-currency, multi-time-zone, geographically diversified truly global, commented John Thain, Chief Executive of NYSE Group. 7 The new company would have stock exchanges in various countries, so each government would continue to oversee the stock market located within its borders. In the U.S., for example, the Securities and Exchange Commission (SEC) would maintain its regulation of NYSE Group. The Big Board s efforts clearly show how stock markets are becoming highly competitive, global enterprises. Just like the companies they list, stock markets prosper by offering customers the services they want at prices they re willing to pay. 1. NYSE Group, Inc., 10-K for fiscal year ended December 31, 2005, U.S. Securities and Exchange Commission, 2. Electronic stock markets are called electronic communication networks, or ECNs. 3. See Frequently Asked Questions about the Hybrid Market at: hybmarket/ html. 4. Frequently Asked Questions About the Hybrid Market. 5. Also included is the London International Financial Futures and Options Exchange (LIFFE), which trades options and other sophisticated investments. To Think About Compare and contrast another stock market to the NYSE Group. Choose from one to the exchanges mentioned here or one of the other major U.S. exchanges (AMEX or NASDAQ). Would you buy stock in NYSE Group? Why or why not?. 6. Alistair Barr, NYSE, Euronext Unveil Merger Agreement, MarketWatch, June 2, 2006, Marketplace, American Public Media, May 22, 2006, marketplace.publicradio.org/shows/2006/05/22/pm html. In The News is published by the Foundation for Investor Education for The Stock Market Game Program. Copyright 2006 Foundation for Investor Education. Learn about our exciting new national essay contest - InvestWrite - Visit 68

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71 Suggested Grade & Mastery Level High School - Novice and Apprentice Suggested Time Two 50-minute class periods Teacher Background How to InvestWrite Every student with an active team portfolio ID and password may participate in InvestWrite. InvestWrite, an innovative writing competition produced by The Stock Market Game program, adds a critical thinking component to help reinforce concepts learned in the classroom. Students in InvestWrite are asked to apply the knowledge and skills they gained through The Stock Market Game to different investment questions. The questions are grouped into elementary, middle, and high school. The questions also address a wide range of essay types (e.g. contrast/compare, cause/effect, argumentative, narrative, etc.) and strategies. Student essays are 700 words or less. The InvestWrite writing competition is supported by regular opportunities for students to write. Writing exercises and prompts can be found in The Stock Market Game s lesson plans and newsletters. You may access these teaching resources in The Stock Market Game s Teacher Support Center. Login with the Advisor ID and password you received when you registered. Go to to login. For detailed information about InvestWrite visit Vocabulary Closing: Concluding paragraph or statement of an essay that summarizes the writer s opinion or answer to the essay question. Draft: A first attempt at composing an essay. The goal of a draft is for the author to capture the ideas he or she feels is important to the reader. The draft is then edited to focus on the strongest points being made. An essay usually goes through several drafts before it is submitted. Essay: A written composition no more than 700 words responding to the investment question posed for a specific grade level. Evidence: Citation(s) from reading(s) that support the concepts and ideas expressed by the writer. InvestWrite: An innovative national writing competition, produced by The Stock Market Game program, adds a critical thinking component to help reinforce concepts learned in the classroom. SMG Writing Organizer: A visual template to assist writers with organizing their essays. Supporting Facts: Concepts and ideas from the reading(s) that support(s)s the writer s opinion or answer to the essay question. Performance Objectives The students will be able to: Identify the main idea/main problem in an InvestWrite question. Write an essay that informs and/or persuades its readers. Use appropriate grammar, spelling, structure, and language to convey intent. 71

72 Subject areas English Language Arts, Social Studies, Economics Materials InvestWrite essay: The Investment Race SMG Writing Organizer InvestWrite Assignment sheet Springboard Activity Ask students to create a list of the things they have learned about saving and investing through The Stock Market Game. Share the lists with the class and compile a class list. Explain that they will have the opportunity to demonstrate what they have learned by writing an essay in response to an InvestWrite question. Distribute InvestWrite Assignment sheet or visit the InvestWrite web site for the essay question ( Use the Assignment sheet or Web site to explain the InvestWrite Contest. Procedure Reading Before Writing Distribute copies of the InvestWrite Winning Essay and highlighters. Ask students to read the essay highlighting important information/point being made by the author. Discussion Before Writing ASK What are some of the points ( details) the author makes in the essay? What is the main idea of the article? Why did the author choose to highlight those particular details? What conclusion does the author offer? Explain that the students will be writing an essay that answers the InvestWrite contest question which was reviewed earlier. Read the background and question for the InvestWrite contest aloud and review what it is asking. Organizing Before Writing Distribute the SMG Writing Organizer to the students and display one on overhead. Together fill out the organizer brainstorming ideas in response to the InvestWrite background and question. Developing an Outline Have the students use the SMG Writing Organizer to develop the outline for a three- paragraph essay. They should be encouraged to develop an engaging opening, provide a thesis sentence, supporting facts with evidence from the background or other sources, and a conclusion. 72

73 Assessment Draft Writing Have the students use their ideas to write an essay using a three-paragraph structure in response to the InvestWrite contest prompt. Application Final Writing Once the drafts are completed the students should get feedback to make final correction to their essays. Students should be given an opportunity to share their essays before you collect for grading/feedback. Enrichment Distribute a recent newspaper editorial to the students. Working individually, ask them to contrast/compare the editorial to their essays. Have the students rewrite their essays into editorials and submit to either local newspapers. 73

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75 QUESTION Pick a sector of the economy that you feel will do well, or not do well over the next five years. Some examples of sectors other than transportation are: healthcare, financials, energy, technology, and consumer goods. Think about business and world events that may affect your sector during the five-year period. Find out what sector analysts are saying about your sector. By doing research, describe why you feel your sector will do well or not do well in the next five years. (Hint: Mutual fund companies often have sector funds, which you can look at to track performance, along with other research.) 75

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77 A Healthy Investment It is pretty hard to predict the future, but if I had to choose an investment market sector that would increase in value over the next four years, it would be the health care sector. The health care sector includes: biotechnology, pharmaceuticals, medical, and managed care providers. Demographic studies have been made that divide the United States work force into five different age categories. The Pre-Boomer is a person who was born between the years 1934 to1945. A Boomer is one who was born between 1946 and A Cusper was born between 1960 and Next is the Buster, who was born between 1969 and Last is the Nester, born between 1979 and The Boomers are currently between the ages of 47 and 60 years old. The estimated number of boomers in the U.S. is over 78,000,000 or 25% of the total population. In addition, they make up 48% of the work force. As these boomers age, there will be increases in health care spending, prescription drugs, nursing homes/assisted living centers, and cosmetic surgery. A recent event that greatly affected the health care sector was the Medicare Prescription Drug Improvement and Modernization Act of Part D of this Medicare Act was initiated in 2006 and is the biggest expansion of Medicare since the program was created in 1965 (briefing.com dated ). Part D impacts every segment of the health care sector. Under this plan, the United States government will now help pay for prescription drugs. These payments are expected to exceed those of both individuals and the private health insurance companies. More boomers will be able to get prescription drugs through Medicare and the amount of money spent on prescription drugs will increase. It is estimated that it will rise to $369 million by the year Another event that will occur this year and will affect the health care sector in the next few years is the patent expiration of five widely prescribed drugs to lower cholesterol, manage depression, relieve allergies and aid sleep: Zocor, Zoloft, Pracachol, Ambien, and Allegra. Once their patents expire, they will be open to generic substitution. Although sales will decrease for the current companies who produce these drugs, this will be good news for consumers, other drug manufacturers, and the health insurance companies. In the past ten years, health care spending in the United States has outpaced the growth rate of inflation, the population, and the gross domestic product. During the last few years, the national health care spending has increased to $1.7 trillion, which is equal to $5,670 per person. With the aging boomer generation, it is projected to reach $3.4 trillion by the year Some economists have said that the rise in health care spending might increase inflation and lower the economy s employment rate. The rising cost of health care will negatively affect employers, employees, and also the federal budget. In order to fund this health care spending, the government will either have to raise taxes or increase its borrowing. The average person is affected by either paying higher taxes or higher interest rates as a result of the government s borrowing. Other economists, however, say that the increase in health care spending will be outweighed by the improvements in technology that will result. The health care industry will be able to provide new options for treatment and treat a larger number of people. The quality of the treatment will improve and you will get more for your money. Although the two kinds of economists cannot agree on whether the increase in spending in the health care industry will help the U. S. economy, they do agree that it will help the health care investment sector. The increase in spending will create more jobs in the health field, increase wages for its workers, and increase the demand for health care goods and services. The market future is difficult to predict because it is so dynamic. But I estimate that the health care investment sector, which increased by 8.4 percent over the last year, will continue to do well over the next four years. Health care stocks are a good option for investors because they consistently yield profitable returns. Effects of Health Care Spending on the U.S. Economy 25 Feb Facts for Features Special Edition Oldest Baby Boomers Turn 60! 03 Jan archives/facts_for_features_special_editions/ html Healthcare 03 Mar StockAnalysis/SectorView.html Kennedy, Marilyn Moats (2005) Managing Change: Understanding the Demographics of the Evolving Workforce handout from seminar, pp