Week 4: Importance of a Strategy & Construction of a Portfolio

Aims and Preparation

Synopsis: Through case studies, illustrate ways that people commonly speculate in the stock market and ask the students to think through the actions, thereby formulating the idea of a successful strategy in how to navigate the stock market.

Invite the students to construct their own portfolio and also to comment on why they picked those stocks and when they are going to sell them.After teaching the students some basic portfolio theory, let them construct the portfolio again and observe the differences.

TY Objectives:Explain and develop the characteristics of a successful strategy

List some major pitfalls of stock market investing

Engage the students in an observation and advisory role

Simulate the construction of a strategy

Encourage the students to hone in on “what to buy and when to sell”

Ask the students to articulate their reasoning

Props:Provided Slides and Notes

Provided Worksheet

Homework:Class 1: Your opinion – “The stock market is just for gamblers”

Class 2:Do the exercise sheet again after the discussion in class

Teacher Guidance

Class 1“Importance of a Strategy”

Suggested Timing / Activity / Comments
5 minutes / Draw the analogy between any physical journey and that of the stock market / Explain that nobody starts out on a journey without knowing where they want to go, how they are going to get there and preparing accordingly. Why should navigating the stock market be different?
5 minutes / Talk through each of the test cases / Go through each test case ensuring that the students understand the nature of each situation. Subliminally, you are also illustrating some major pitfalls of investing in the stock market.
15 minutes / Let the students analyse and draw their conclusions / Ask the students to go through each test case and write their observations and recommendations.
15 minutes / Discuss the recommendations for each test case / Talk with the class about what they came up with and what each test case should have done. Finish on the slide which details the characteristics that a strategy should have – the main aim of the class.

Please refer to the “Importance of a Strategy” PowerPoint Presentation.

Class 2“What do you recommend?”

Suggested Timing / Activity / Comments
5 minutes / Explanation of the Activity / Give them a worksheet and just give a simple instruction that they are to pick out a portfolio of stocks from it.
10 minutes / Activity: Construction of a Portfolio / Let each student construct their own portfolio
15 minutes / Formal Teaching: Tips on construction of a portfolio / Ask the students for feedback on each point of the slide and then detail what should form the basis of their decision.
10 minutes / Activity: Construction of a Portfolio (Take II) / Ask them to construct the portfolio again, bearing in mind the lessons learned during the formal teaching session.

Please refer to “Construction of a Portfolio” Worksheet and PowerPoint Presentation with the accompanying notes and slides.