A Beginner’s Guide To The Stock Market

Stock Market NewsOkay, so you haven’t got a hot clue how to read tea leaves, tarot cards, or even explore the enigmatic entrails of extinct creatures to find out what’s in store for your future. The good news is that you’ll enjoy three days of uncommunicative silence, the bad news is you that won’t be able to cultivate your usual merry attitude towards extreme personal danger posed by the unexpected visit of the Great Green Arkleseizure (who doesn’t kow-tow to anyone, including the King of the Jungle). The bad news is that you it you’ll probably drop your favorite sandwiches, spill your juice and with luck will be full of flies. If you want to create a positive impression this month, befriend a wacky witch or two (and frankly, who knows what wonders can happen with a broomstick in a china shop)!

That’s the good news, the bad news is that your ability to be tactless and rude will not win you any friends or influence people, unless you’re prepared to wear a green spandex body suit, matching fins and a floppy hat on St. Patrick’s day. Unfortunately, many kids who participate in these programs are unprepared for these competitions at a young age because they lack a foundation in other basic areas of financial literacy, so they come away with the idea that investing in the stock market is little more than gambling using complicated graphs and charts.

This article introduces some important concepts about the stock market that you will want kids involved in investment clubs to know. Stock competitions usually involve individual students or teams of students who buy stocks with an imaginary pool of money. The return of the stocks in her team’s portfolio was the deciding factor in the team’s placement in the stock competition. My daughter’s teacher required that teams research information about the stock and its performance before they purchased shares. This fantasy stock portfolio from tracks lots of information that can be used in an educational setting.

Return—The amount of money made on an investment, either through growth in the company’s stock price, or income created by the company’s earnings. Timing the market is a key idea in day trading, and most investment professionals try to steer small investors away from this practice in real life because it is so risky and potentially damaging. Many kids that learn about the stock market early on think of it as a big gambling business.

By reading the news and combining a social studies element to the stock market competition, teachers could make a study in economics and business relevant to students. One successful strategy of conservative investors is to buy income-producing stocks and reinvest the earnings into more shares of the same stock. This concept is probably not going to be covered in a stock market competition, since the duration of the competition is usually only one or two business quarters.

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