Financial Independence
Escape the Rat Race
Stock Market Assignment, by David Drews





Here is a basic assignment I was given in Economics 201.  Pick ten stocks,
all in different sectors (technology, banking, defense, biotech, oil, real
estate, etc, etc) and put them in a paper portfolio or in an online portfolio.  
Pretend to have $10,000 invested in each stock.  Record the purchase
price of each stock and record the performance each market day for at
least three months.  Pick the best stocks you can. Use the article above to
help you find some good stocks.

Also include in your portfolio, track the prime rate, Treasury bill rates, the
inflation rate, the price of gold, the price of oil, the S&P 500, the value of the
dollar, and any other indicators or benchmarks you think would be useful
(like the funds in your retirement plan, a foreign market, any investment or
any indicator you want). Do not overload yourself with too much data.  All
the data you need to gather should be in your paper.  Subscribing to the
Wall Street Journal is a great idea too!

Again, track the stocks and your indicators for at least three months.  Also,
follow national news for events that could affect the market and monitor
your portfolio. You will learn a lot by doing this. As you look at your portfolio
each day, week, and month or for a year if you paper trade for that long,
compare your portfolio with the market itself and with the other indicators.  
Ask yourself:

1) Was there a relation between interest rate movement and the price of
your portfolio?
2) Was there a relation between the value of the dollar and the price of your
portfolio?
3) Did any major news affect your companies or the economy as a whole?
4) Did your portfolio beat the S&P 500?
5) What did you learn from your investment wins and losses in your
assignment?
6) Would you try again with real money?