Studying Stocks

Springdale students get into investment game

— Caroline Hornor plans to be a forensic anthropologist someday, but on the side, she intends to play the stock market.

If the market makes her rich, she might trace her success back to the practice she got in school.

Caroline, a ninth-grader at Springdale’s Central Junior High School, is one of hundreds of students from the district who competed last semester in the Stock Market Game, a program that allows kids to invest a virtual $100,000 in real stocks, bonds and mutual funds. Springdale had more teams participate in the game last semester than any district in the state and regularly sees about 1,000 students participate every year.

At A Glance

Stock Market Game Rules

-Each team starts with $100,000 in “play money.”

-Teams must buy stocks in 100-share lots.

-Teams may invest no more than 30 percent of their total equity in any one stock.

-Teams may not buy or short sell stocks valued at less than $5 per share.

-Teams may buy on the margin, and the interest rate is 7 percent. Portfolio balances receive 0.75 percent interest.

-There is a 1 percent brokerage fee on all transactions.

Source: Economics Arkansas

The game started nationally in 1977. In Arkansas, it is facilitated by Economics Arkansas, a private, nonprofit organization that promotes economic literacy.

During 10-week “seasons” held each semester, teams from across the state compete to see who can turn the biggest profit. The current season started Jan. 28 and runs through April 5.

Caroline, along with teammates Josh Benford and Ross Washburn, finished second in the region in the Stock Market Game’s junior high division last semester.

They barely missed first place, which went to another Central Junior High team, Marcos Rodriguez and Matthew Sij, who made a profit of about $8,000.

Thomas Pittman, a pre-Advanced Placement teacher at Central, served as an adviser to both teams. Students in his classes are required to do a project each semester, and the Stock Market Game qualifies as such a project.

Pittman wasn’t sure how to account for his students’ success at the game.

“If the kids are competitive, I think winning takes care of itself,” Pittman said.

He said he doesn’t consider himself an economics expert.

“You’d rather have my students’ (stock) advice than mine,” he said.

Springdale teams enjoyed great success last semester. Besides the junior high teams, a team from Lee Elementary took first place in the elementary division, while a Westwood Elementary team took second and a Shaw Elementary team took third. A Har-Ber High team finished third in the senior high division.

Teams can consist of between one and five students. Last semester, out of 1,362 teams competing in Arkansas, 177 were from Springdale. The Bentonville, Rogers and Fayetteville districts fielded a combined 47 teams, according to Economics Arkansas.

“The Springdale School District has really put an emphasis on integrating economics throughout the curriculum,” said Marsha Masters, who coordinates the Stock Market Game at Economics Arkansas. “They are recognized across the state and really the nation for that. There are a large number of students who participate in the Stock Market Game.”

At A Glance

Local Teams

Benton and Washington counties were represented by a combined 260 teams in last semester’s Stock Market Game. Here are the participating districts and the number of teams from each:

Bentonville: 1

Fayetteville: 18

Prairie Grove: 28

Rogers: 28

Shiloh Christian: 8

Springdale: 177

Source: Staff Report

The Central Junior High participants said they checked their stocks numerous times per day and paid attention to world events that might influence the price of their stocks.

“We’re constantly in touch during the day,” Caroline said. “Then you go home and watch the news. The entire world is participating in the stock itself, so you feel like you’re a part of it.”

Matthew Sij said he and teammate Marcos Rodriguez bought only three stocks. He said they learned how quickly the market can change.

“The stock market is a giant gamble,” Matthew said. “We were last for a week and a half and then all of a sudden we went up to second place.”

He estimated he spent about an hour per day on the game.

“You can’t just put in one three-hour session and be done with it,” he said.

At the end of each semester, the top two teams from each division and region — there are six regions — are invited to Little Rock for an awards luncheon. They receive cash prizes, T-shirts and medals.

Win or lose, Pittman said, students benefit from playing the Stock Market Game.

“First, they’re going to learn economic terms, so they have to learn a new vocabulary,” Pittman said. “Then they learn how the stock market works. They learn some of the politics of it, how everything is tied together.”

Students also learn math and personal finance, he said.

“One cool thing about the game is you get play money, and if you lose it, your life’s not over,” Pittman said. “They come out of it with more responsibility. They understand the issues with money and the economy.”

A 2008 study conducted by Learning Point Associates, a nonprofit education consulting organization, found the Stock Market Game positively affected student academic performance. Students who played the game scored significantly higher on math and financial literacy tests than their peers who did not play the game.

Betsy Penix, a gifted education teacher at two Springdale elementary schools, advised the team at Westwood Elementary that took second place in the state. That team bought stock for Yahoo!, FedEx and Bank of America and made about $3,000, she said.

The students didn’t know what a stock was before they started the game.

“It comes down to choosing three researched companies, taking their earnings over the past year, and choosing to invest in that company,” Penix said. “We tried to invest in different sectors, to diversify. It’s not totally luck.”

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