Karen Harris, a computer resource teacher at Holualoa Elementary School on the Big Island, says “;investment education is so important because it is real, applicable knowledge and totally engages the children.”;

In the fall of 2008, Harris introduced her students to the Hawaii Stock Market Simulation, a free, statewide, online simulation offered by the Hawaii Council on Economic Education for students in grades 2 through 12. This year, two of her fifth-grade teams swept the competition in the Elementary/Middle School Division, earning a more-than-18 percent return on their investments in just 10 weeks. That is a return most money managers would be jealous of these days.

Harris was introduced to Hawaii SMS in 2006 by attending a free HCEE investment basics workshop at Kealakehe High School. These teacher-training workshops are offered each semester to introduce teachers to the stock market and investing in order to promote and integrate economics education into existing curricula. Workshops focus on key terms, the investment process, risk tolerance, asset allocation and diversification.

Some of her students got more than they bargained for when she first started participating in fall 2008.

“;My students watched the crash happen before their young eyes from October through December,”; Harris said. “;I was shocked when one of my 10-year-old students asked, 'What is selling short?' I had to get back to him on that one.”;

In Hawaii SMS each team of two to four students receives $100,000 in virtual money to buy and trade stocks and bonds 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. Their goal was to beat the performance of the Standard & Poor's 500 index in 10 weeks.

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, more than 1,600 students on 650 teams from 40 schools statewide participated this semester.

This year's top place Elementary/Middle School Division students were Haliamai Kealoha, Nicholas McComas, Ben O'Connor and Keana Tafolla. Their portfolio, which included stocks such as Visa, Disney, Target and Apple, was valued at $118,811.96 at the end of the simulation. Their 18.81 percent gain outperformed the S&P 500, which increased by only 8.89 percent. This semester, 59 of Harris' students participated in teams of three or four students.

Just like professional money managers, Harris' students had different ideas about how to put together the best portfolios.

Haliamai, whose dream it is to be a brain surgeon, was concerned with current economic affairs.

“;We thought hard about what people would actually buy—not so much clothes because times are hard,”; she said.

Meanwhile, Ben, who wants to be an inventor, was more practical.

“;I decided on buying Visa because I heard some adults talking about how they maxed out their credit card and would owe the credit card company a lot of money,”; he said. “;I thought it would be good to own that company.”;

By participating in the Hawaii Stock Market Simulation, Harris thinks “;that students, especially the girls, (should be) exposed to (the stock market). It builds confidence, generates curiosity and invites ethical issues to be brought to the table. I learn and they learn.”;

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. The spring 2010 Hawaii SMS is sponsored by the Pacific American Foundation and the AKAMAI Initiative. For more information about Hawaii SMS or the Hawaii Council on Economic Education, please visit www.hcee.org.