Virtual stock exchange (VSE) is a trading practice that equips individuals with valuable investment ideas. It allows students to gain credible knowledge on stock trading through imaginary investment procedures that are undertaken professionally. The procedures ensure high level of efficiency and effectiveness in terms of resource allocation to potential holdings. This is evident since they are economically viable and result oriented. Indeed, stock trading that has just ended has been instrumental in enhancing student’s knowledge power on stock investment issues. It has made the participants to understand how stock markets operate and key parameters that influence investment decisions in various settings. The participants affirm that the trading demonstration that was a success from its initial stages has enabled them to develop strong stock trading knowhow that will see them succeed in life.
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That is the knowledge acquired seeks to give them ahead start in the business world that is characterized with immense competition. It is imperative to note that the initial capital injected in the stock market for unit purchasing was $1,000,000. The amount was invested in the growth fund stock portfolio that was vibrant and promising. The portfolio was favorable since it had effective stock holdings that were recording high returns on daily basis due to high demand. The money was distributed to the stock units that included GCI, GMT, KDN, GCU, GAM and KCLI effectively. This resulted to positive growth in terms of earnings and cash available that stood at $25,027 and $1,025,027 respectively at the end of the trading period.
Positions that exceeded my expectations
Evidently, the virtual stock trading game exceeded my expectations since it provided a real life platform for trading that is similar to the live trading sessions as evident in various security markets. It provided the best opportunity to the participants since it aided the understanding of the underlying issues that influence effective stock trading. It also enabled the participants to acquire credible and exemplary experience pertaining to resource rationalization in the stock market (Adkins 1). The trading session was driven under set guidelines and maximum stock trading procedures. It provided a real picture of how live trading sessions are conducted in the renowned security markets and how stock values move. Consequently, the virtual game especially the normal growth fund trading game that was selected, provided an easy way of stock buying, selling and buying to cover.
This was made possible and simple using a trading card that ensured even distribution of the investment amount across multiple stock portfolios. Indeed, the trading card was instrumental in ensuring proper distribution of resources during the execution of each transaction. For instance, it ensured effective allocation of resources to reserve, gains and commission accounts each time a transaction was executed. This was vital since it was enabling investors to establish how much a stock holding was worth, the gains that it could generate and minimum value for the unit (Albers & Klaus 197). This helped in decision making in ensuring that investments made were able to generate positive returns. That is the card facilitated the withdrawal of some investment decisions made especially investment on stock holdings that could not yield positive gains or returns.
The trading platform also exceeded my expectations since it provided clear stock demarcations and click buttons that facilitated trading activities. It was also arranged in a professional manner that provided users the opportunity to monitor the performance of stock portfolios and their future capacity (Fabozzi 700). Consequently, it had well designed programs that included graphical representation of stock performance, numerical strength, gains per order and credible buying to cover information. Thirdly, the professionalism with which the trading process was being executed also exceeded my expectations. This was evident since the stock trading was being done in a systematic manner as it is in the security live trading sessions. It was also incredible to observe that traders were only allowed to make orders and wait for the trading officials to complete the transactions. This is because they play the role of the intermediaries who connect investors with potential buyers and sellers (Fabozzi 700).
Conditions that contributed to exceeding experience
Key conditions that have facilitated the success of this practice include availability of clear theoretical guideline to stock trading, graphical representation of the stock movement and currency changes. Proper configuration of the demonstration platform and effective guidance on how to establish potential investment portfolios also form key conditions that has enabled the achievement of my expectations (Fabozzi 580). In particular, theoretical guidelines provided proper principles and obligations that a potential investor should embrace to achieve meaningful gains. The guidelines enabled me to identify growth fund stock portfolio that was a vibrant performing stock unit with a strong growth potential. The stock unit was favorable for new investors or learners on stock trading issues. It presented lucrative units that were attractive to investors. This is because the units that included GCI, KDN, GMT, GCU and KCLI facilitated effective distribution of the initial capital that was $1,000,000.
The amount generated a substantive buying power under the growth fund portfolio and resulted to high gains amounting to $25,027 at the end of the trading session. Proper marking of various stock portfolios and the availability of the distribution board also presented major contributions in achieving the intended goal of the trading process. The stocks were clearly marked with distinct unit names and value or minimum cost of acquisition. This enabled investors to invest on stocks that were within the minimum range of cash they intended to inject. For instance, it facilitated the identification of stocks whose values were ranging between $5 to $20 since the minimum amount recommended for the trading process was $5 and maximum was $20.
Positions that underperformed and the factors that created the performance gap
In particular, identification of viable stock portfolios was challenging during the process. This was because of inferior understanding of key performance parameters that influence stock performance. This aspect nearly affected the value of the returns and the gains that my investment portfolios could attract. Therefore, it is vital for stock traders to understand the market dynamics and various parameters that influence performance of various stock units. This is essential in achieving high returns. As noted, poor understanding of the performance, parameters in the stock market presented evident gaps that affected the trading process. Inferior understanding of the parameters that include the value of the stock, its growth potential, competition and its stability compromised my effective trading.
Key things learnt from Virtual Stock Exchange experience
The visual stock exchange trading has enabled investors and students to learn diverse things that appertain to stock market operations. The lessons learnt include the understanding on how stock market works, how to institute a viable investment strategy, how to make money risk free and parameters of identifying winning stock portfolios (Albers & Klaus 197). Understanding of viable stock investment tips, forex trading, cash movement, currency strength, and valuation of stock indexes were also learnt. Consequently, knowledge on when to make purchases, identification of viable sock portfolios and effective monitoring of trading dash board are key incentives that were attained due to the study.
These trading incentives were vital in ensuring the development of favorable and viable investment choices. They enabled investors to make credible and right investment decisions after considering all the underlying environmental factors (Albers & Klaus 197). Notably, the virtual trading provided an effective platform for skill development to potential investors. The platform was instrumental in enabling investors to understand how cash movement between various portfolios was taking place. It enabled them to know how to make orders pertaining to stock purchasing, selling or buying to cover that contributes to the overall performance of any venture. This was instrumental as evident in my stock portfolio that recorded an exemplary performance.
It closed trading with no cash borrowing, good reserve amount, high returns, gains, positive buying power and good amount of total earnings. The exemplary performance was due to proper balancing or distribution of resources to viable stock portfolios and proper determination on when to make various transactions. Evidently, my injected capital that was amounting to $100000 generated an income of $1,025,027, overall return of 2.50% and positive gains of $180,892 as per the close of activity in the market. This shows how well the information acquired at the initial stages of the game was effectively utilized.
How the experience will influence personal investing decisions
Indeed, visual stock exchange experience sharpens investment skills of individuals. It enables students to understand the market dynamics in a holistic manner. This facilitates the formulation of credible, realistic and economically viable investment decisions. It also ensures effective identification of strong stock portfolios in the market (Albers & Klaus 197). The virtual experience obtained will influence my investment decisions presently and in future. It will inculcate a culture of cautiousness when making investment decisions. This will ensure that any investment decision will be evaluated to ascertain its viability and the capacity to yield best returns.
This is essential since investment decisions are dependent on how much return they can generate. This explains the assertion that investor’s main concern is the value of return on investment that a venture can generate (Adkins 1). That is the lower the value the less attractive the investment portfolio while the higher the value the high attractive the portfolio. Therefore, the virtual experience will enable me to identify strong and high performing stocks or stock units with the promising growth that are attractive in the market. Consequently, the experience will enable me to develop realistic and attainable investment strategies in the future.
Indeed, virtual stock trading exposes potential investors and learners to the conventional trading practices, operating policies and best modalities of establishing potential stocks on daily basis. Many students credit the practice due to the exposure and noble experience that they have received. For instance, it has enabled them to understand the market trends, viable investment portfolios, best time of currency purchasing and selling. It has also equipped potential investors with the requisite incentives on how to build a wining stock portfolio, develop a viable investment strategy and understanding on how the stock market works.
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Adkins, Michael. Stock Portfolio Management Tools. 2011. Web.
Albers, Sönke, & Klaus, Brockhoff. Cross-functional Innovation Management:Perspectives from Different Disciplines: to Klaus Brockhoff for His 65. Birthday. Wiesbaden: Gabler, 2004. Print.
Fabozzi, Frank J. Handbook of Finance: Financial Markets and Instruments. Hoboken:John Wiley & Sons, 2008. Print.