Stock Market Simulation

Johnson, Jack

Student Work

Stock Market Simulation

Public Deposited

The objective of this project was to examine the nature and history of the stock market and compare the implementation of two different investment strategies in a trading experiment. Two simulated investment accounts were used in the four-week experiment; one following a passive “buy and hold” strategy and another following a more active strategy relying on technical analysis. At the end of the experiment, the buy and hold account had a return of -13.4% and the technical analysis account had a return of -2.8%. Although both accounts lost value, the more active strategy outperformed the passive strategy as well as the general market in all metrics. Though passive investment strategies are generally considered the better option for long-term growth, this research indicated that active investing strategies could outperform passive strategies, particularly in bear markets.

This report represents the work of one or more WPI undergraduate students submitted to the faculty as evidence of completion of a degree requirement. WPI routinely publishes these reports on its website without editorial or peer review.

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