The Stock Market Game is about.
Anyone with classroom experience knows what competition can do. I recall one time when I had a student in the back of my Economics class practically sleeping through class (I know - hard to imagine), when one day I introduced a goofy "Jeopardy" game. You would have thought the student had sat on a fire cracker. He insisted I put the questions in the library so he could study them and then win the next Jeopardy challenge.
Lesson plans for The Stock Market Game involve interactive, hands-on learning as kids do the actual analyzing of the economy, industry, and specific companies. They examine a bit closer the products that they use and like on an everyday basis. They argue among themselves, present the case for their picks, and then follow them like a hawk. All of this is great. I wish we had it when I was a kid. I would note that I am competitive and surely would have enjoyed it. I do wonder, however, if some kids don't come away from the experience with the thought that investing is too complicated for them or disappointed because their portfolio didn't do well.
There is a problem with all of this that concerns some professionals. Simply, it misleads kids on what investing is really about. It gets kids to think that, to be a successful investor, one needs to spend a lot of time analyzing stocks and that it is short term in nature. It leads to kids thinking that investing is more like the mega millions lottery game than what it really will be for them in the real world.
When they enter the real work world, they will have the opportunity to participate in qualified plans such as 401ks and in vehicles like IRAs and Roth IRAs. This is where most kids will come face-to-face with real investing. In 401ks they will have to pick funds, not individual stocks. They will likely be given a presentation by a commissioned broker. They need to understand that, from the beginning, they have the most valuable asset of all in the investment realm--time--and that time means they don't care about the value of their portfolio next week, month, or even year. In fact, they should understand that it is to their benefit if stocks drop while they are accumulating assets. What is important is the value of their portfolio/nest egg when the day comes where they will be drawing on it for retirement purposes or to create a new career in their late 50s or whatever. They need to know the evidence on how costs affect investment performance over the long term.
In short, kids are going into a world where they are responsible for their own retirement. They shouldn't be faced with a "learning on the job"situation. Combining instruction on managing a 401k over a lifetime with the shorter-term orientation of The Stock Market Game is a way to put kids on the right investment path.
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