Common Cents Investment GroupMonday January 13th

First meeting of the semester

AgendaCCIG updatesMacro update – Weiyi XieStock market todayRisk managementInvestopedia results

Spring Semester UpdateALWAYS accepting new members

◦$20 dues for new members◦Pizza each meeting, t-shirt, simulator

prizePlease fill out survey (copies in

front)◦What do you want to see more of?◦Long term or short term investing?

RISE Student Investment ConferenceRedefining Investment Strategy EducationUniversity of DaytonMarch 27th - 29th, 2014 (Thursday –

Saturday)Largest student investment conference in worldCosts

◦$165 per registration (register before Jan. 31st)◦$94 per night per hotel room◦$20 travel

**See me after if your are interested**

Guest SpeakersProfessor Matt SheridanAccounting firmsChristian GabisLuv SharmaOthers

Will try for guest speaker every 2-3 weeks

Macro Update

Weiyi Xie

Financial News for the past monthQE tapering:

◦From $85 billion to $75 billion in January 2014

◦Expected to decrease $10 billion every month, until it goes to 0

◦What does it mean to the US economy? US debt? US stock? US housing market?◦What does it mean to world economy,

especially to emerging markets (like Brazil, India, etc)?

Dr Janet Yellen was appointed as the new Chairperson of the Federal Reserve

Financial News for the past monthNon-Farmal Payroll (NFP) report

for December 2013◦Expected: 197,000 new added jobs◦Result: 74,000 new added jobs◦Unemployment rate: 6.7%◦Fed agreed to raise interest rate

once unemployment rate reaches 6.5%

◦Weather?◦Others?

Major indexes down todayMany companies lowered earnings

estimates

Market CycleMarket near all time high

S&P 500

Dow

Risk ManagementPlanning for a deviation from

expected outcomeWill you beat the market?

◦Average market return is 10%◦What’s your opportunity cost if you

don’t?How to plan for risk on a single

trade?◦Protect from significant losses using stop

orders◦Example to follow

Risk Management ExampleAccount size of $10,0002% risk - tolerable value of loss

◦$200 - based on total account valueLong QQQ (Nasdaq ETF)

◦Purchase price $87 / share◦Stop order set up at $84.00

Risk Management ExampleRisk/Reward ratioSet a price target of $96

Stop exit

Entry Target

Risk Management Example3.5% loss on trade at stop2% loss on account at stop

stop

Trading JournalKeep track of trades over the

yearsRemember market trendsLessons learnedWays to do it

◦Excel spreadsheet◦One page descriptions◦Make up your own◦Many brokerages have good portfolio

analysis tools

Investopedia Simulator Update

Investopedia SimulatorCreate reference players“Market”

◦SPY, DIA, QQQ, SLY“Experiment”

◦Throwing a dart approach◦Pick 25 completely random stocks

Compare “Market” to “Experiment” at end of semester

Questions???