Students Win in the Investment Game at SMS

It’s never too early to learn how to invest your money – at least not in Scarsdale. At the Scarsdale Middle School, the process of learning to manage a stock portfolio can start as early as sixth grade, when students can sign up for the after school Investment Club, run by SMS Math teacher Robert Saya.

Saya, who has background in finance and accounting took over the club when Larry Chatzinoff, another math teacher became an assistant principal at the school. The club is open to students in grades 6 -8 and no one is turned away. A very popular after school activity, this year there are about 50 students enrolled who are managing their own phantom stock portfolios using a computer program from stockmarketgame.org .

Stockmarketgame.org and the New York Times provide free accounts for each student – and kids can access these accounts in school or at home. The program monitors trades, balances, assesses fees and allows students to simulate the experience of managing their own funds. Each student starts the school year with a $100,000 portfolio and at the end of April, Saya assesses who came out with the most money – or in some years, who lost the least.

With so many enrolled in the club, Saya relies on the older students to help the younger ones and sometimes asks students to attend on alternate weeks. Saya reports that kids learn valuable lessons from participating, grasping mathematical and investment concepts. Students often follow companies in the news, and theorize about how business events will affect share prices. Saya advises the students to learn what the companies in which they invest do, and to consider any ethical issues they may have with the company’s products or policies. Students use Yahoo finance to do research, track investment performance and compare competitors in the same industry. Saya also teaches the students about portfolio diversification and instructs them on how funds that are not invested accrue interest.

At the end of April all the portfolios are closed out and those who come out on top are recognized.

Last year’s winner was seventh grader Joseph Metviner of Fox Meadow. He finished the year with $123,000 in his portfolio and is pictured above with Mr. Saya. Joseph not only exceeded all the kids’ balances at SMS but came out tops among all 12 schools that participated in Westchester as well. He was awarded a medal and a certificate. In previous years there were also cash awards. Metviner’s strategy was to do research and to purchase stock in companies he believed in. He made few trades during the year, using a strategy of “buy and hold.” In the real market, Joseph purchased four to five stocks that have not performed as well as his SMS portfolio.

Asked to comment on the experience, Metviner said, “The contest was a lot of fun and has really turbo charged my interest in the stock market.”

We asked Mr. Saya if he has noticed any stocks that have stood out in the student’s portfolios and he told us that Chipotle Mexican Grill and stocks in the alternative energy sector have been winners. But he made it clear that he is an educator, not an investment advisor, and warned parents to do their own research. Next year, Saya says the students will learn how to evaluate companies to see if they are under or overvalued and might even get a peak at the real stock exchange via a videoconference.

The students are learning some valuable lessons that many adults only learn the hard way. So if your portfolio is suffering you may want to look to your kids for advice!