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Keith McCord reporting Investors with money in the stock market have been doing a lot of hand-wringing lately. As you know, it's been quite the roller coaster for the past week. There's also been some nervousness by some students involved in a stock-picking contest.
In the contest, the students had $1 million on the line! Actually, it was play money worth $1 million.
Back on Nov. 30, honors students from the Westminster College business school and a group of seventh-graders from Rowland Hall-St. Mark's began a stock competition. The object was to see which team could take that $1 million and make more money picking stocks.
Now the students are cheering, even though they actually lost money in the stock market. The seventh-graders are the winners of this first-annual stock competition against Westminster College's honors students.
In the spirit of true Wall Street competition, the losing team bought pizza for the winners.
It's not that the seventh-graders made more money than the college students; it's that they lost less of their $1 million portfolio. In fact, both teams finished under the $1 million mark.
"Our strategy was to, since it was a very short time, we bought some very volatile stocks, which in the end came back to bite us because we didn't adjust our portfolio over time like the middle school did," explained John Cook, Westminster student.
This competition began about two months ago. Westminster came up with the idea in an effort to teach the younger students how financial markets work, and the seventh-graders were quick studies. When the stock market tanked recently they took action.
"Most of our stocks were going down, and we knew that they weren't going to come back up because Ben Bernanke did something with the interest rates. So, I knew that the stock market wasn't going to do very well," seventh-grader Austen Van Burns said.
The seventh-graders cashed out their stocks so they wouldn't lose any more, and they barely hung on to win. "And many of them moved intuitively and said, ‘I'm going to sell and sit tight for awhile.' Nothing that came from me, so I can't boast any credit there. I give all the credit to the kids," said Stephen Bennhoff, principal at Rowland Hall-St. Mark's.
"These kids learned some valuable lessons about investing and money, and they got pizza," said Richard Badenhausen, director of the honors program at Westminster College.
One of the honors students said his team invested in really volatile stocks. They also invested in beer companies, too, because he said, "We're college students!" The college students were actually happy the seventh-graders won.
