Question You chose your stocks at the beginning of the quarter. For this week’s assignment, you w

You chose your stocks at the beginning of the quarter. For this week’s assignment, you will

1. Update your portfolio value and fill in the new table.
2. Discuss the performance of your stock.
   

I. Update your portfolio value using the chart described below.
The current value of your portfolio is composed of two parts:

• the current value of the stock you purchased, plus
• the value of any dividends issued while you owned the stock.

If a stock split occurred while you owned the stock, it would affect both the number of shares you own and the share price. This happens infrequently, however. Read about stock splits athttp://www.sec.gov/answers/stocksplit.htm . Even though this article claims the value of your shares won’t change if there’s a split, this isn’t quite true. Even though you will be issued equivalent shares, the market will react to the news of the split, which never happens without a reason.

1. Find the current price of the stock and multiply it by the number of shares you now own. This is the current value of the stock.
2. Search for dividends declared on the company site, msn.com, or other financial news service for your company or stock splits. ??A dividend is a payment a company makes to shareholders, who are the owners of the company. A dividend is declared by the company’s Board of Directors. ??When a dividend is paid, a certain amount is paid per share of stock owned. Dividends are declared for owners as of a certain date. For example, Microsoft declared a dividend of $.08 per share for all shareholders of record on November 17, 2005. The dividend will be paid on December 8, 2005. So even though I would not have the money in my hand when I determined the value of my portfolio, I would include it because I would be paid that money shortly. Companies may also issue dividends in the form of additional shares of stock. This would increase you number of shares.
3. Fill out the chart below–it is a slightly revised version of the first chart you completed when you did the Stock Market Game assignment.?? The chart will summarize the changes to your portfolio since the original purchase.

Here’s an example using the chart below:

• The current price of Microsoft is 27.97 per share. My number of shares has not changed. The value of my stock is 386.97 X 27.97 = $10,823.55.
• Microsoft’s dividend of $.08 per share will pay me $.08 X 386.97 = $30.96.
• The total value of my portfolio is the current share value plus dividends. $10,823.55 + $30.96 = $10,854.51
• The total return of my portfolio is the increase in value (not the total value) divided by my original investment. Return = increase / original investment

My portfolio increased in value by $854.51 (Current value – original value), so the yield is $854.51/$10,000 = 8.5%. In other words, I earned 8.5% on my original investment of $10,000 over about two months. Not bad!

II. Discuss your portfolio’s performance.
What were some of your original assumptions and predictions? Did they turn out as you expected? Do you know why or why not? Write one or two paragraphs here.

Include any events–national, international, within the industry or internal to the company–that may have affected the price.

Examples (these are examples only–don’t limit yourself to these):

• International–a foreign manufacturer introduces a competing product, or an overseas supply of a strategic material is endangered by civil war.
• National–recession, weather (think Hurricane Sandy), changing tastes, fads.
• Industry–technology breakthroughs, mergers
• Internal–high-profile leader dies (e.g., Steve Jobs), new product introductions.

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