Biotech trading is not for the faint of heart, so if you are a long-term, risk-averse investor, biotech trading is probably not for you. NFLX also has technicals on its side, scoring a 10 out of 10 for price momentum, according to Thomson Reuters Stock Reports. 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. Students in investment clubs and stock market simulations use real-time stats to track their stock earnings. 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. 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. Many kids that learn about the stock market early on think of it as a big gambling business.
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. In the U.S. the stock market has seen a recovery and is now back over 10,000, which is good news for investors like me who have staid the course. First off, a bear market should be like a bargain bin to you for individual stocks.
But children who learn to see the stock market as an arena for day-trading may be set up for making some potentially unwise decisions later on. Let’s make sure to do more than teach children day-trading techniques if we enroll them in stock competitions. If investors would take the time to learn how the market works and take a long term view they would be much better off. In March, the market didn’t crash hugely, mostly a big dip downward, but in October-November, it has a high chance of crashing. I think most kids will benefit from participating in as stock market investment exercise.