Portfolio Challenge
Every quarter FIC analyst teams will participate in a portfolio challenge, collectively picking a portfolio of stocks for a seven week competition. The challenge for Winter quarter will run from April 8 to June 2. Investment performance will be tracked using the Investopedia simulator and a prize will be awarded to teams who outperform the Dow.
Guidelines
- $100,000 Starting Value for Portfolios
- Stocks must be listed on a major U.S. exchange (NYSE, NASDAQ, AMEX)
- Stocks purchased must be above $5 per share
- Short selling, options, and margin trading are allowed
- No mutual funds or options trading
- Both market and limit orders are allowed at a commission of $10 per trade
- Free cash will earn 2% interest, margin loans will be charged 8%
- Teams can make an unlimited number of transactions, but a maximum of 25% can be weighted in any one position
Winter 2010 Winner: Momentum Traders
The Dow gained 4% but the Momentum Traders beat the benchmark with a 10% return. The team's biggest gains came from long positions in Ford, Apple, US Steel, and the Palladium ETF as the global economy continued to recover.
Fall 2009 Winner: Momentum Traders
The Dow added 5% but the Momentum Traders outperformed with a 9% return. The teams portfolio included gold ETF's, both small and large cap China stocks, and technology companies.
Spring 2009 Winner: Momentum Traders
The Dow climbed a whopping 30% as the market recovered from the depths of its March lows. The Momentum Traders portfolio returned 12% as they invested in commodities and internationally in China.
Winter 2008 Winners: Investology, Momentum Traders, and Value Seekers
Despite an 18% drop in the Dow, three teams managed to outperform the market by a minimum of 15%. The best performance was Investology's 6% return by maintaining a balanced portfolio of both long and short positions at all times.
Fall 2008 Winner: Momentum Traders
The Dow gained less than 1% during this volatile period, yet the Momentum Traders posted a gain of 18%. The team's strategy consisted of identifying broader themes within individual industries and the market, then trading leveraged industry/market ETF's long or short.
Spring 2008 Winner: Momentum Traders
The Dow gained just 1% again during the latest challenge, but the Momentum Traders portfolio appreciated 14%. The team focused on investing in companies with strong underlying fundamentals and positive technical movement.
Winter 2008 Winner: Investology
The Dow was up only 1% during this period, but team Investology gained 11%. Again, the group benefited from shorting financials. Additional gains came from investing in companies involved in the production of commodities.
Fall 2007 Winner: Value Seekers
In a period where the Dow lost 5%, the Value Seekers managed to post a 12% gain. The team's greatest gains came from placing bets against the financial industry which suffered from the subprime fallout.