Connor Bailey had a tough challenge in this year’s The Stock Market Game. He set a record in last year’s competition, finishing the Afterschool Yearlong Division with a stock portfolio valued at more than $1 million.
While he didn’t match the value of last year’s portfolio, he not only repeated as the winner of this year’s Afterschool Yearlong Division but also won the Fall 2021 and Spring 2022 divisions as well.
The Stock Market Game is a national program of the SIFMA Foundation that allows students and teachers the opportunity to invest a virtual $100,000 in stocks, bonds and mutual funds in a simulation contest. Economics Arkansas sponsors the game in Arkansas.
Bailey, who recently graduated as a member of the Class of 2022, won last year’s competition by dealing in volatile stocks, keeping up with market trends and making daily trades. He kept the same strategy for this year’s competitions, although he wasn’t sure how well it may work.
“Last year, I wasn’t sure if it was just complete luck or not, so when I won all three sessions this year, I knew that my strategy was functional and would actually work in the real stock market,” Bailey said. “I didn’t really switch up my strategy at all. I tended to stick to volatile stocks that rose very quickly and predicted that these stocks would fall just as quickly, so I would short them.”
The competition finished in April before most recent events had a severe impression on the stock market, but even so Bailey noticed a difference in how the market was reacting.
“The market has been the most volatile I’ve ever experienced in these past two years,” he said. “With COVID restrictions being lifted in most places, I was predicting positive outcomes for the retail and airline sectors. Then the Russia/Ukraine conflict completely switched the dynamic of the market.”
At the beginning of November, his portfolio was around $200,000. He grew it to more than $260,000 by the middle of that month, but he made a bad decision to hold onto a stock with a lot of momentum for too long. By the end of the month, his balance had fallen to about $150,000. It didn’t deter him, however.
“A 42 percent portfolio decrease would be enough to make most people stop playing the game, but these losses helped me make my strategy more sound and not take too big of risks,” Bailey said.
He also learned from that time period that what is happening in the world can affect the markets dramatically. That led him to pay more attention to the news on a daily basis
“I’m constantly reading the news and just generally looking at current events,” Bailey said. “I made sure I was up to date with what was happening around the world and what companies had to deal with certain regulations being passed, new promising sectors, etc. My strategy isn’t based so much on forecasting stocks to predict their success rather than catching them in the middle of a large upswing or downswing.”
The lesson he learned in November paid off well for the remainder of the contest. By the end of the Yearlong contest, Bailey had grown his portfolio’s value back to $352,867, the top portfolio in the state.
“I had always been curious about the stock market in general last year, and when I saw the opportunity to compete in a game like this where I didn’t have to risk my own money and could learn from the opportunity, I knew I should give it a try. I would like to thank ASMSA for giving me these opportunities to allow myself to find my new passion,” he said.