How to Invest in the Stock Market
1470 Introduction to Finance
TOPIC OR UNIT OF STUDY
Financial Analysis of the Stock Market
CONTENT STANDARD(S) AND OBJECTIVE(S)

Explain causes of stock price fluctuations
(Activity 1)

Explain strategies for selecting investments
(Activity 1)

Explain fundamental analysis used in making investment decisions
(Activity 1)

Interpret financial ratios significant to investors
(Activity 1)

Assess securities fundamentals
(Activity 1)

Explain factors to consider when selecting investments
(Activity 1)

Choose investments based on fundamental analysis
(Activity 1 & 3)

Describe how securities are traded
(Activity 1)

Discuss the nature and scope of investment banking
(Activity 1)

Discuss the nature of convergence/consolidation in the finance industry
(Activity 1)

Discuss the nature and scope of compliance in the finance industry
(Activity 1)

Describe the use of technology in compliance
(Activity 1)

Write inquiries
(Activity 2 & 3)
INTRODUCTION
We all hear about the Dow and the NASDAQ going up or down each day; it’s on the radio and the
television, but what does it mean? Understanding the stock market is a complicated process, but it is
also an important tool for any new business owner. In this unit we will play a stock market game with
$10, 000 of virtual money and learn how the market works.
ESSENTIAL QUESTION
How do you decide what company to invest in on the stock market? How do you interpret the market
data to understand how the company is doing and what the market performance is?
INTEGRATION OF ACADEMICS, TECHNOLOGY, ENTREPRENEURSHIP
To complete this project, students will use basic terms and concepts, to complete the following
academic, technology, and entrepreneurship activities:
 Academic activities –website research, critical thinking and writing skills;
 Technology activities – website research using interactive game site, & use of MOS Word;
 Entrepreneurship activities – building beginning knowledge of stock market, investing, and
financial report interpreting.
STUDENT INVOLVEMENT IN PLANNING PROCESS
Students will be using an interactive stock market game for this assignment where they can make their
own decisions based on the knowledge they build during the worksheet process. They will then decide
what important facts they need to ask for from a potential company to invest in, and what facts they
want to pass on to a colleague when suggesting a company for them to invest in.
TASK(S)
 Play stock market game in Activity 1 while completing worksheet
360 min
 Write inquiry letters using proper technique to different audiences in Activity 2
90 min
 Write a memo using business terminology in Activity 3 after checking stock status
60 min
 Compare stock performance with peers in class to wrap up the unit
30 min
RESOURCES
websites: www.weseed.com
http://news.morningstar.com/classroom2/course.asp?docId=145093&page=1&CN=COM
http://ezinearticles.com/?Stock-Exchange-Basics&id=788964
http://www.wisegeek.com/what-is-investment-banking.htm
http://www.investopedia.com/terms/c/consolidation.asp#axzz2AWHOL24n
http://download.netiq.com/CMS/WHITEPAPER/NetIQIndustryWP_FSI.pdf
http://www.wallstreetandtech.com/regulatory-compliance/deutsche-bank-securitiesinvests-in-comp/219000191
http://owl.english.purdue.edu/owl/resource/653/01/
TECHNOLOGY USE
Computers, Word software, Youtube videos, Video cameras, Movie Maker software, and the Internet
EVALUATION
 Activity 1 - Play stock market game and complete a worksheet
36 pts
 Activity 2 - Write inquiry letters using proper technique to different audiences
48 pts
 Activity 3 - Write a memo using business terminology
15 pts
Total Points
99 pts
Authentic assessments will be evaluated with the rubrics that are located on each activity.
TIMELINE
Block scheduling-6 days, periods-12 days. This does not include time for lecture, textbook readings, and
discussions. Depending on student’s ability, extended time may be needed on some projects.
Day 1
Set up & play stock market game in Activity 1 while completing worksheet
90 min
Day 2
Continue playing stock market game in Activity 1 while completing worksheet
90 min
Day 3
Continue playing stock market game in Activity 1 while completing worksheet
90 min
Day 4
Finish playing stock market game in Activity 1 while completing worksheet
90 min
Day 5
Write inquiry letters using proper technique to different audiences in Activity 2
90 min
Day 6
Write a memo using business terminology in Activity 3 after checking stock status 60 min
Compare stock performance with peers in class to wrap up the unit
30 min
CONCLUSION
At the conclusion of this study students will understand what company to invest in on the stock market
based on the market data. They will also understand how a company is doing and what the market
performance is based on market reports.
Playing the Stock Market
Set up an account at www.weseed.com and log in. The program will want you to invest money right
away, so purchase a small amount of stock, $500 or less.
Now that you have created an account, we want to spend some time learning about investing and the
stock market. To do that, go to the Learn section and start at Level 1. We are going to start with a pretest to see what you know and what you don’t. Click on Level 1 in the Report Card on the left, then the
Quiz. Take the quiz, then see the items you need to go back and read through to get 100% on the quiz.
Complete Level 1, 2, and 3. Send your pr-test score & your post-test scores to your instructor, by doing
a print screen of the results. You do not have to have 100% on the quiz, but must have at least an 80%
on all three levels.
Timeline:
Level 1 – 1 Day
answer question 9 today
Level 2 – 2 Days answer questions 1, 2, 3, 5, 6, 7, 8 & 12 today
also finish spending your
Level 3 – 1 Day
answer questions 4, 10, & 11 today
Question
Source
1.
What affects the
price of stock
shares?
Level 2 - #3 & 4
2.
List some strategies
for selecting
investments .
Level 2 - #5
3.
Explain the types of
basic analysis used in
making investment
decisions.
Level 2 - #1, 5, 8
4.
How do you
interpret financial
ratios significant to
investors ? List a
few.
Level 3 - #7
http://news.morningstar.c
om/classroom2/course.asp
?docId=145093&page=1&C
N=COM
5.
Review the securities
fundamentals
covered in each item
shown here.
Level 2 - #3, 5, 10, 12
Your Answers (3 points each)
6.
Describe factors used
deciding when
choosing
investments.
Level 2 - #1, 3, 5, 6, 8
7.
Choose investments
based on your
fundamental analysis
in WeSeed game.
List stocks here.
Describe how
securities are traded.
Level 2 - #1, 3, 5, 6, 8
What is investment
banking>
http://www.wisegeek.com
/what-is-investmentbanking.htm
8.
9.
Level 2 - #2
http://ezinearticles.com/?S
tock-ExchangeBasics&id=788964
10. How does
convergence/consoli
dation affect the
finance industry
Level 3- #3 & 5
http://www.investopedia.c
om/terms/c/consolidation.
asp#axzz2AWHOL24n
11. Give a brief
description of
compliance in the
finance industry
Level 2 – 12
http://download.netiq.com
/CMS/WHITEPAPER/NetIQI
ndustryWP_FSI.pdf
12. How is the use of
technology in
compliance
beneficial for
businesses?
http://www.wallstreetandt
ech.com/regulatorycompliance/deutschebank-securities-invests-incomp/219000191
Total Points
______ of 36
Professional Communications
Practicing your professional communications and letter writing skills, write two inquiry business letters
as described below. Check the grading rubric for requirements and grading.
Letter 1 to Company




Letter 2 to a Colleague
Write a business letter to one of the company’s you
chose to invest in during the We Seed game.
After researching their financial information using
the We Seed game and Yahoo Finance, formulate 3
questions for that company.
In the letter, explain that you are a stock holder,
then make your inquires and explain WHY you are
concerned about these issues.
Remember to use proper business letter
techniques using business letter template.




Write a personal letter to a friend/colleague about
the We Seed game you are using to learn about
investing & inquiring if they would like an account.
Point out three reasons why you chose one of your
companies to invest in.
Give three reasons why you like using the We Seed
game to learn about investing.
Remember to use personal letter template, but
changing it to meet the purpose of this letter.
Resource for letters: http://owl.english.purdue.edu/owl/resource/653/01/
Grading rubric for EACH letter:
Topic
4 points
3 points
2 points
1 point
Return
Address &
Date
Return address or letterhead
is complete & accurate.
Date is complete &
positioned correctly.
No spelling, capitalization, or
punctuation errors.
Inside address is complete &
accurate.
Salutation is appropriate &
complete.
No spelling, capitalization, or
punctuation errors
Organization is appropriate
to the writer’s purpose.
Paragraph order follows the
suggested model.
Message is complete and
correct.
Return address or
letterhead is missing
some information.
Date is there but format is
incorrect.
3 spelling, capitalization, or
punctuation errors.
Inside address is missing
information.
Salutation is inappropriate.
3 spelling, capitalization, or
punctuation errors.
Return address or letterhead
is missing.
Date is missing.
4 or more spelling,
capitalization, or
punctuation errors
Inside Address
& Salutation
Return address or
letterhead is complete
& accurate.
Date is complete &
positioned correctly.
1-2 spelling, capitalization,
or punctuation errors
Inside address is complete
& accurate.
Salutation is appropriate
but incomplete.
1 - 2 spelling, capitalization,
or punctuation errors.
Organization is appropriate
to the writer’s purpose.
Paragraph order is close to
the suggested model.
One piece of information is
missing or incorrect.
Organization is not
appropriate to the
writer’s purpose.
Paragraph order is close to
the suggested model.
Two pieces of information
are missing or incorrect
Two pieces are missing or
inaccurate.
No organization pattern .
Paragraph order does not
follow suggested format.
Message has enough missing
or incorrect information
to be ineffective in
meeting the writer’s goal.
More than two pieces are
missing or inaccurate.
Word choice is mostly
appropriate for
audience.
Some terminology used
and accurate usage.
Some variation in sentence
length. One fragment.
Paragraph divisions are
somewhat effective.
Main purpose of the
message is clear.
1-2 spelling, capitalization,
or
punctuation errors.
1-2 grammar & usage
errors.
Word choice is
inappropriate for
audience.
Minimal terminology used some inaccuracy.
Two sentence fragments.
Message is there, but
underdeveloped.
Awkward paragraph
construction clouds the
message.
3-4 spelling, capitalization,
or punctuation errors.
3 – 4 grammar & usage
errors.
Word choice is
unprofessional.
Little to no terminology used
or all used inaccurately.
_____ of 24 letter 1
_____ of 24 letter 2
_____ of 48 total
Content
Organization &
Accuracy
Closing, &
Signature
Word Choice
Sentences
Fluency,
Paragraphs, &
Mechanics
Closing is appropriate.
Written & typed signatures
are present.
Word choice is appropriate
for audience.
Good use of terminology and
is accurately used.
Complete sentences of
varying length.
Paragraph divisions are
effective.
Number of paragraphs fits
suggested format.
Main purpose of the
message is clear.
No spelling, capitalization, or
punctuation errors.
Grammar & usage are
correct.
Total Points
One piece is missing or
inaccurate.
Inside address is missing.
Salutation is missing.
More than 3 spelling,
capitalization, or
punctuation errors.
More than 2 sentence
fragments.
Message is lost in poor
construction.
Paragraphs do not follow
suggested format.
Spelling, capitalization, or
punctuation errors make
message unclear.
Grammar & usage errors
makes message unclear.
Stock Market Memo
Continuing the practicing your professional communications, write a memo to your instructor on the
progress of your stock account in the We Seed game, and Cc the memo to your parents to share your
educational experience with them as well. Your top and bottom performing stocks should be listed in
the memo and WHY you feel they have performed this way. You may need to read the news
information in We Seed on those two stocks.
Review the grading rubric below to insure that you include all required elements.
Grading rubric:
Points Detailed Requirements
2
Used a contemporary design memo template
2
Proper addressing of the memo TO the instructor and CC to parents
1
Complete name used in the FROM location
2
Subject is clear and concise
5
Memo text area is well written, concise, uses complete sentences, and
describes at least two specific stocks and their status.
2
News data on the top & bottom performing stocks has been described, and
personally evaluated.
1
A print screen of your portfolio summary should be added to the bottom of
the memo and cropped to the summary only.
15
Total points
Points scored
_____ of 15