Stock Market Game Essay

The Stock Stalkers

Road trips are fun, but there can be a few problems on the way. What if you hit a speed bump? The car goes up and down and up and down. You seem to always be running out of fuel. A FLAT TIRE?! Where did that come from? Occasionally, no traffic and pleasant scenery. Money invested in the Stock Market is the same way. Sometimes it has stable growth and sometimes it’s wacky. I was excited to play the Stock Market Game as it was something we had never experienced before. My friends brought different approaches and perspectives to the table, ideas and competencies I would have never thought about. When we made investments, I realized what I was good at and what I could do to contribute to our stock picks. Together as a team we talked about our OWN opinions and avoided group thinking and confirmation bias. We went through everyone’s ideas, concerns, questions, and we could determine whether to buy or wait. I have to admit, we had a few arguments, but we talked about it and listened to each other. At first our investment choices seemed like good decisions, I cannot truly say they were good decisions in hindsight.

We worked as a team throughout this experience and we even chatted with some of the other groups to see what stocks they invested in, what were doing well and what weren’t, solutions, ideas, opinions, and news. We found a few compelling stocks out of that. We used our strengths into thinking about stocks. Two of us researching and the other two putting puzzle pieces together on investing in a stock. We made decisions by discussing YTD, amounts per share, previous close, Red vs. Green, Dividend, PE Ratio, and Day’s Range. We went through articles and many other factors to prove the stock’s worth. That’s how we ended up investing in AMZN, ABNB, SOFI, LCID, FARM, etc.

We realized that this was a bad idea. We tried to time our purchases and hoped we would be able to turn them around for a quick profit. Our portfolio dropped by 6.6%. Ouch! Historically speaking, the market recovers over time and produces 10~12% annual compound growth. We learnt our lesson. Instead of dancing in and out of various individual stock positions, we are now seeking a diverse portfolio of “buy and hold” approach to ride out the short-term market volatility. 

Given the opportunity to invest $10,000, we will invest in a balanced portfolio that will maximize returns while minimizing downside risk through a mix of ETFs in stocks and bonds in US, International, and Emerging Markets. We will buy and hold and rebalance the portfolio semi-annually to ensure we have a long term perspective as market conditions evolve and our financial goals change over time. I now realize that we were on track, but weren’t really exploring and diversifying enough and mostly speculating. I think we will invest more in low cost ETFs. By investing in them, we can invest in many great stocks without having to pick them out individually. It is also less risky as if you have a basket filled with eggs and the eggs are your money, and the basket is your stock, what if the basket drops? Then all your eggs crash. I like to think of ETFs as a plate of food. You need a little bit of dairy, nuts, protein, fruits, veggies, and grains on your plate. This way, if one stock crashes, only a few dollars are down the drain and you can rely on the other stocks you have invested in with your basket of ETFs.

The Stock Market Game has been so much fun! I have learned that the Stock Market is a great way to create wealth for those with the right long term mindset and play the long game. It has made me aware of my own biases and educated me to be financially responsible as I grow up.  I’ve also made so many new friends along the way. I once heard this quote, “If you want to go fast, go alone. If you want to go far, go with other people.” This quote has really intrigued me because of its message. Our team was a great team because we could rely on each other, we were responsible, we were not afraid to speak up and challenge each other respectfully. I think this experience was my favorite this whole year. Thank you for this opportunity.