They talk about stock prices, and the importance of diversifying. Some wonder if it’s time to mix up the portfolio a bit. And one person asks: What goal are we trying to reach?
The 14 students – 8th graders at St. Catherine – St. Lucy Catholic School in Oak Park – sound like veteran investors, though they’ve been learning about stocks for just a few months. They’re participating in Big Shoulders Fund’s annual stock market program, which introduces investing basics and the importance of financial intelligence to hundreds of students in the Chicago area.
Though this year’s program – the 13th annual – looks a little different from past years when the students could meet in person with their investment teacher, they’ve adapted to the challenges of COVID-19. And they’re hopeful they can do as well if not better than how St. Catherline – St. Lucy performed last year, when it placed third out of 64 teams.
During the last class meeting held before Christmas break, students reviewed the three stocks in their portfolio: Simply Good Foods, Uber and O’Reilly Auto Parts. At the start of of the contest, each school was given $3,000 to invest. Since buying their stocks in the fall, the St. Catherine – St. Lucy team’s portfolio had grown by early December to $3,177.
This put the team in 39th place out of 66 schools competing in this year’s competition. But there’s plenty of time for the 8th graders to move up, says their investment coach and teacher.
“Congratulations, that’s really a good start with our portfolio,” said Paul Goodworth, who leads Goodworth Wealth Management and has been coaching the St. Catherine – St. Lucy team the last few years.
Goodworth is was one of about 150 business people who over the course of the school year teach students the basics on investing, from how to evaluate a stock and when to buy or sell, to the importance of doing research and managing risk.
Another aim of the program is to encourage students – especially students of color – to consider careers in the financial industry, says Joshua D. Hale, president and CEO of Big Shoulders Fund.
“There’s such an underrepresentation of minority members in any financial firm or bank. … Anything we can do to change that, we will,” Hale said.
As they analyze the value of their three stocks, the St. Catherine – St. Lucy team debates whether to make any changes to their portfolio.
“Here’s the decision: Do we want to sell any of the stocks or stay with them?” Goodworth asks.
The team captain for O’Reilly Automotive says her research has revealed it’s taking longer for people to save money to buy a new car, so they’re spending more to repair their current vehicle. That could explain why O’Reilly has increased from $406.78 when the students bought the stock to the price in early December of $441.
Another student suggests selling the stock, while still another – Adonia Owens – wants to hang onto it, noting her mother is having car trouble. “She can’t get the airbag light off. We may have to go to O’Reilly’s.”
Goodworth tells the group, which meets every few weeks over Zoom, “there will be a time when we want to sell a stock because it’s reached its potential.”
Maybe Uber will be that stock, he says. If so, then the students have to decide how to deploy that money. “Here’s what we own today. What do we want to own in the future?”
He encourages the 8th graders to pay attention to what their friends and family members get for Christmas, to use that information to determine what if any changes to make in the portfolio come early 2021.
“The goal is to beat our competition and make some money … we’re going to ride the market for as long as we can ride the market. … we want to limit our losses and ride our gains,” Goodworth says.
By the end of class, the students have decided to hang onto the three stocks and review their holdings in January when they meet next.
Then Goodworth gives the students this assignment: Decide which stock each of them wants to own in their own individual portfolio from January through May. The student with the best-performing stock will get a laptop or tablet at graduation.
In an interview afterward, Adonia says she’s eager to win the individual stock contest.
She’s also happy to be learning the basics of investments because her father buys stocks. “I finally got to understand his world and understand stocks. … So to tell him that I was learning about it, it was a really fun bonding experience.”
Learning about different companies and evaluating their worth over time has helped her refine her math skills. “You have to make sure the numbers are right.”
It also has taught her to pay attention to the price of things and to notice when she’s in a store how much of the product is still on the shelf. “It makes me ask questions a lot more about what’s going on with these companies and these businesses.”
Arnette Young, who teaches 8th grade at the school and been involved with the stock market program for six years, says the students see how their actions – like using Uber Eats or making purchases at O’Reilly Auto Parts – affect the larger world.
“It’s allowing us to apply the things that we’re learning to today’s world,” Young said. “We’re seeing how our everyday life is being impacted … how as a consumer, you’re actually impacting the stock market.”
“Each year it gets better and better.”