• What is the stock market?
Stock market is a market for the trading of company stock and derivatives (generic term for an investment) of same; both of these are securities (legal right given to a creditor by the borrower) listed on a stock exchange as well as those only traded privately
• What is a stock exchange?
The stock exchange differs from the stalk market in that it is an entity (a corporation or mutual organization) in business of bringing business of bringing buyers and sellers of stock together. For example, stock market in the United States includes the NYSE (New York Stock Exchange), the NASDAQ (National Association of Security Dealers Automated Quotations) and the AMEX (American Stock Exchange). Although many other stock exchanges exist, participants in the InvestYoung can only trade on Canadian and American stock exchanges.
• Concept of Trading
Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry. The other type of exchange is a virtual kind, composed of a network of computers where trades are made electronically via traders at computer terminals. The New York Stock Exchange is a physical exchange, where much of the trading is done face-to-face on a trading floor whereas the NASDAQ is a virtual exchange, where all of the trading is done by computers.
• Purpose of Function of the Stock Market
In general, a company will offer sales of their shares to the public in order to raise capital, which in turn will be channeled into various investment projects.
• Leveraged Strategies
Short Selling:
Seller borrows stock and sells on market, hoping for price to fall. Essentially reverse of normal purchasing, in that money is gained if stock drops. Exiting a short position is called “covering a short position”.
Margin Buying:
Buyer can borrow up to 50% of their portfolio value to invest in stocks. For example, if you have $100,000, then you can borrow $50,000.
LEADERSHIP SKILLS
Delegation
It is never smart or reasonable to wear yourself thin with piles of work. Delegating tasks is important to ensure that the work is kept to a minimum and done in a timely manner. In addition, it gives your executives the chance to gain experience in completing specific duties. When the executive team is formed, ensure that you and your team are aware of what needs to be done. Refer to the Branch Management Guide for specific duties for the secretary, treasurer, communication liaison, and events coordinator.
Time Management
Time management requires discipline and organizational tools. Discipline is the awareness of what is important and what is not. As a student, it may be tempting to hold things off to the last minute, but it is always more effective to finish tasks well ahead of their due dates. As well, it is highly recommended to have a branch management calendar to keep track of events and due dates. You can add new information to the calendar, when there are updates. This calendar can also be used to complete Monthly Correspondence Reports.
Encourage Involvement
As a leader, you must motivate your peers to participate in activities, such as the Invest Young Stock Competition, guest speakers, and presentations. Spread awareness about Investors of Tomorrow by advertising through school announcements, posters, and word-of-mouth communication. In order to fully utilize school announcements and posters, start advertising several days in advance. In addition, spread awareness through word-of-mouth and let students know that financial education is relevant to anyone, not only to business-oriented students. You can also speak to your business or math department about using Investors of Tomorrow tools to compliment the course curriculum.
Communications
Communication between the school administration and executives is essential. Inform the school administration of any important events and encourage them to learn more about Investors of Tomorrow. Ensure that your executives are regularly updated of duties and events by holding meetings and email correspondence. When hosting presentations to a large group of students, it is best to be confident when conveying your message. Be sure to speak loudly and confidently, know what you are going to say, and look at the audience. Hold rehearsals before the actual presentation, in order to eliminate the need for scripts. Finally, if you want to ask a question or voice a concern, never hesitate to communicate with the National Team – we are always here to help. We want help your branch succeed and hear any innovative ideas that would support our mandate.
Invest in Yourself
As a branch manager of an Investors of Tomorrow branch, it is imperative to have a good understanding of economics, investments, and capital markets. There are many ways to educate yourself: read the online resources on the Investors of Tomorrow website, visit your local bank and library, or ask a teacher to mentor you about finance. In addition, read the business section of the daily newspaper – they will keep you updated with the business world. It is important to educate yourself, because then you are able to spread your expertise on finance and economics to other students.
Initiative
In order to make things happen, you must take a proactive approach to your management role. It is essential to promote students to become involved in the various events held by Investors of Tomorrow, and take advantage of the resources available to them. Additionally, promote dedicated work ethics to your fellow executives, and encourage them to educate themselves about business. Finally, if you have an idea to help improve your branch, take action and do what needs to be done.
The summative assessment strives educate and expose students to the world of the stock market. They participate in an online trading simulation operating in real market conditions, including accurate prices on shares of stock traded on real capital markets. They learn the functions of the capital markets, basics to trading, economic trends, how to manage their money, analyze companies, take calculated risks, develop a keen eye for opportunity, and much more; knowledge and skills learned best through hands-on experience.
Students are given a portfolio of $1,000,000 (CAD) to buy and sell stocks listed on the major North American markets (e.g. TSE, NASDAQ, NYSE). Trades will be over a period of six weeks, with the purpose of gaining the greatest possible return in your portfolio. They are given an account online through which they will trade and track their portfolio over the course of the assessment. For each trade, they show a series of calculations and rationale through “trading forms” (sample on the right). At the end of the six week period, their accounts are liquidated by the sale of all of their holdings. The student with the highest final portfolio value after liquidation will be declared the winner of the competition.