SPOTLIGHT ON

Developing an
Investment Strategy
The Mavericks, who placed third in the 2020 Region 2 finals
at Infosys in Bangalore, answer questions from the judges.

Your team investment strategy is the essence of the Wharton Global High School Investment Competition.
You are ultimately evaluated on the strength, creativity and individuality of your strategy, not on how
much money you make in your portfolio. This competition does not require lots of buying and selling of
stocks to improve portfolio value. So, it’s important to understand the purpose of an investment strategy
and how you might go about building it.
As your team begins to plan, think of your investment strategy as your guiding principles. Your team
strategy is a set of rules and activities that will guide the investment decisions you make for your potential
client. “Buy low and sell high” is not an investment strategy. Most teams want to find stocks that have a
potential to grow in value and then sell them later at a higher price to make a profit. Your strategy should
be unique to your team and reflect how your team plans to build your client’s wealth over time.
And don’t forget the creativity! When you’re pitching your strategy to your client in hopes of winning his
business, how will it stand out from the hundreds of other team strategies? The creative aspect of your
work is fueled more by the demands of the competition and less by the actual reality of asset management
– but at the end of the day, it is a big part of the learning that we want you to take away. In business,
you have to be able to use your critical thinking and creativity to
solve problems. Expressing your strategy creatively is critical to
EXPLORE AND LEARN MORE:
competition success. Check out this top 10 list of strategy tips:
Read how another high school
1. Your strategy is your team’s plan of attack! You should student learned to think strate-
gically while choosing stocks in
immediately begin to build your unique team strategy. You can this first-person essay: A Lucky
refine/tweak as you progress — but, remember, it is guiding the Apple and the Evolution of an
decisions that your team makes. Investment Strategy
2. A strategy should consider your client’s investment objectives. If you want more glimpses into
team investment strategies,
3. Components of your strategy might include (but are not limited visit the KWHS Newsroom,
to): allocating the $100,000 over types of assets, sectors, which features articles about the
industries, stocks; guidelines to help you know when you want investment competition since it
to sell a stock in your portfolio; and risk guidelines. Then, how to launched in 2011.
express it creatively?

WHARTON GLOBAL YOUTH EXPLORES INVESTING

©2020 The Wharton School, The University of Pennsylvania
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4. An investment strategy will keep you grounded and prevent you from acting on impulse or emotion.
5. How will this strategy help you execute a long-term trading plan…and address any short-term needs?
6. Which benchmarks will be part of measuring the effectiveness of your strategy, such as indexes and a
target return, like 7% annually.
7. You should assess and understand the strengths and weaknesses of your strategy. No strategy will
be effective 100% of the time, but that doesn’t mean you abandon it. Even the greatest investors are
wrong 1/3 of the time.
8. Value and growth investing are types of strategies. Study these if you want to understand a strategic
approach to investing. However, we can’t have hundreds of teams all following this same strategy.
How will you make your strategy unique to your team? Creative thinking will set your team apart.
9. If you can’t state your own strategy clearly and immediately, then we certainly won’t be able to
articulate it. Don’t bury your strategy!
10. Stick with the plan. Investors, especially for the long-term (which is what this competition promotes,)
don’t want to be market timers. They devise a strategy that guides them through the hype. Great
trades can win battles, but sounds strategies win wars.

Wharton Global Youth Voices: From the Experts:

“We feel privileged to diversify a portfolio for our client,
Ms. Reshma Sohoni. It was indeed very amazing to see
her love for food and traveling…and hence the idea of our
portfolio was born…idealizing the strategy NUTRITION, an
acronym that condenses our team strategy: N: News; U:
Undervalued stocks; T: Technical analysis; R: Responsible
investing; I: Integrated analysis; T: Turbulence; I: Industry;
O: Opportunity; N: Novelty.”
—Team Mavericks, Amity International School,
Sector-46, Gurgaon, India, 2020
Some thoughts on how your strategy might address stock
selection from long-time competition supporter Aberdeen
Standard Investment. “Does your team want to invest in a
range of companies that are collectively representative of
the entire market? Does it want to find companies that the
markets are undervaluing for some reason? Does it aim
to find ‘the next big thing’ companies that might grow very
rapidly? Or does it look for large, stable companies that
pay large dividends that provide investors income?”
These are just a few suggestions to inspire your team’s
strategic mindset around selecting stocks.

©2020 The Wharton School, The University of Pennsylvania