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Students get a head start in the market


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POSTED: Sunday, December 20, 2009

It's not just reading, writing and arithmetic in school these days. Wanda Wong of Moanalua Elementary is teaching her students the importance of saving and investing for their future.

Wanda Wong invited her second-grade students to participate in the Fall 2009 Hawaii Stock Market Simulation—a statewide online simulation offered by the Hawaii Council on Economic Education for students in grades two through 12. Thirteen students took her up on her offer, formed teams and invested a fictional $100,000 into the virtual market. Their goal: to beat the performance of the S&P 500 over 10 weeks.

Teammates Ethan Figart, Jordan Kajiwara and Dayne Takai were determined to be the winners of the Elementary/Middle School Division, and they met that goal, beating 129 teams and more than 500 students in their division.

Their portfolio, which included stocks such as Target and Amazon, was valued at $113,484.70 at the end of the simulation.

Their 13.48 percent gain outperformed the S&P 500, which only increased by 7.88 percent.

Hawaii SMS is designed to encourage students to think about setting goals and saving the money they need to reach those goals.

The program also introduces students to the discipline required to become successful investors. Overall, 1,488 students on 372 teams from 37 schools statewide participated this semester.

In Hawaii SMS each team of two to four students receives $100,000 in virtual money to buy and trade stocks and maintain an investment portfolio.

They research and evaluate companies and decide how to invest their cash. Although the money is fictional, the stock transactions are processed at real-world prices in real time.

Wong's students checked in on their portfolios regularly, watching the stocks go up and down and tracking what place their teams were in. Wong encouraged the teams to research the performance history of stocks they wanted to buy and actively discuss what strategies were working for them. She knew that one of the most valuable lessons the students would learn through this activity was making good choices.

“;We cover economics in the third quarter,”; Wong said. “;(The students) can refer back to their Hawaii SMS experience going into our Business Day, which is held each spring.”;

Wong plans to teach her students budgeting, profit-and-loss projections and marketing in preparation for 2010 Business Day. Wong believes that investment education is important because, as she puts it, “;having a business is a risk-taking venture.”;

Dayne said that his parents were proud when he told them that his team got first place in its division. His teammate Ethan added, “;It was fun because we won!”; Ethan's enthusiasm is understandable—his team had to fight its way out of 21st place to win the competition.

Ethan explained his team's investing strategy: “;We chose stocks by seeing if they looked good and by looking at the budget.”;

Target was one of the stocks his team invested in because he and his teammates saw a lot of people going there, especially during the holidays. Their strategy to sell was just as straightforward. A stock had to go when the price decreased and they were no longer making money.

“;We are very pleased that Hawaii teachers are able to incorporate this valuable resource into their classroom activities,”; said Kristine Castagnaro, executive director of the Hawaii Council on Economic Education. “;We are also very impressed with the ambition of these second-graders.”;

If Wong's second-graders pursue their career ambitions with the same tenacity they displayed during Hawaii SMS, the state will be better for it. When asked what they wanted to be when they grew up, not a single child hesitated with the answer: two doctors, two teachers, two police officers, a video game designer, a pharmacist, a firefighter, a soccer player and a Hawaii Pacific University cheerleader.

The Hawaii Council on Economic Education was founded in 1965 as a partnership among business, government, labor and education.

The council's goal is to expand the economic literacy of Hawaii students from kindergarten through 12th grade by improving teachers' knowledge of economics and access to curriculum materials.

By training teachers in economic and financial literacy, the council's vision is to give people in the state the knowledge, understanding and skills to make informed choices in their lives and for their community.