7.1.09

MASTERING MOMENTUM. The best time to learn something about investing is in a down market.

When the dust settles on Wall Street, the investment companies that are left standing might want to pay a visit to Sycamore High School.

It is there that a team of student investors nearly doubled its money in a few weeks, despite working in one of the most turbulent markets in history. The students invested in stocks related to construction and farming – at a time when many stayed away from those sectors.

I do wish that people who follow investments would grasp a simple point: valuing risk is not the same thing as inventing risk.
Of course, it’s a bit easier to gamble when you are playing with fictitious money, and that is what the Sycamore team was doing, participating in The Stock Market Game. A simulated investment exercise, the game is sponsored nationwide by Securities Industry and Financial Markets Association, Wall Street’s largest trade group. In Illinois the game is administered in Illinois by the Illinois Council on Economic Education, which is a branch of NIU-Outreach. The game is part of ICEE’s efforts to create not only savvy investors, but better citizens with strong personal finance skills.
Winning teams must follow rules, including investing in more than one stock, and writing reports that give reasons for choosing their stocks. Most teachers require the essay describing the choices well before the simulation ends.

Good going, kids.

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