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SALT LAKE CITY — The volatility of the stock market can create havoc for investors, but it can also teach valuable lessons to those willing to learn from the peaks and valleys of the exchange.
Some of Utah's best and brightest students and teachers were honored Friday for their participation in the Stock Market Game, a statewide competition geared toward educating students about investing and teaching more about financial responsibility. Winners were recognized at the Joseph Smith Memorial Building in downtown Salt Lake City.
The Utah Office of State Treasurer recently assumed the responsibility of administering the game from the Utah Division of Securities. Participants, who must be teachers or students from grades 4 through 12, managed their virtual stocks over a 10-week period, with the highest earning "investors" being declared the winners in various categories.
State Treasurer David Damschen, who chairs the Utah Council on Financial and Economic Education, said one of the main objectives of the council is to advocate for and strengthen financial education in Utah schools.
"The Stock Market Game piques student interest in some of the important concepts taught in the classroom by adding an element of competition," he said. "I appreciate the incredible efforts of teachers and students to improve financial knowledge."
He said the game itself teaches students about short-term price speculation and securities, along with long-term strategies, such as dollar cost averaging and portfolio diversification.
"This game does both," he said. "The game they play is short-term price speculation and they learn those sound (long-term) investment principles as well."
Damschen noted that recent fluctuations in the stock market have helped students understand the real-life swings the market can take in more volatile periods, particularly when the market had been experiencing an extended period of stability over the past several years.
"Some of the students may be picking up on some of the subtleties of the market as its going through some transition into a period of heightened volatility," he said. "This is a great time for them to be tuned into this kind of subject matter and learning some of these lessons about how the market really functions."
Northridge High School student Alexis Aguirre's team placed first in the high school division. She said the game gave insight on investing they hadn't had previously.
"My favorite part of the game was getting an opportunity to invest into a real-time market simulation — getting to see if the decisions we made would make or lose us money," she said. "We learned how society plays a key factor to investing, how to invest during a bullish market, deciding when was the right time to buy and sell a stock and competing against a lot of other high schoolers."
Members of the winning team in the elementary division based some of their most significant investment decisions on the news, which helped them claim victory.
"Our favorite parts of the Stock Market Game were the tension and the competition of the last few weeks, as we climbed up the rankings and passed the previous first place team in the last few days of the competition," said Nibley Elementary student MaCade Brown. "We had a terrific time learning about companies and how and why they are traded on the stock market."
This is a great time for them to be tuned into this kind of subject matter and learning some of these lessons about how the market really functions.
–State Treasurer David Damschen
CNN Business reported that 2018 was one of the worst years for financial markets in a decade.
The Dow Jones Industrial Average fell 5.6 percent for the year, while the S&P 500 lost 6.2 percent and the Nasdaq fell 4 percent — making 2018 the worst year for stocks since 2008. It was only the second year the Dow and S&P 500 fell in the past 10 years and the first year for the Nasdaq index during that period.
While some investors expressed concerns during the tumultuous time and worried about what is on the horizon, at least one local analyst is not at all anxious about the nation's investment economy for the coming year. However, Jeff Steagall, dean of the Goddard School of Business & Economics at Weber State University, acknowledges that investors are affected by the uncertainty that pervades the federal government and the policies that are impacting international trade.
"We're in kind of an economic boom where firms should be investing and hiring more people, but right now uncertainty is keeping them from doing that," he said. "That uncertainty is making people jittery about investment because they don't know what will happen with the economy in the next year or two."
He added that despite the uncertainty that has prompted investors to buy and sell at furious rates throughout the year resulting in manic high and low periods in the markets, the nation's economy is still fundamentally sound.
"If we can get more certainty and more stability into the (economic) environment, this will probably reverse itself pretty quickly," Steagall said. "The economic fundamentals are still quite strong, not only in the U.S. but in many parts of the world."
He said that strength is what makes him confident the decline of the markets is not likely to continue into the New Year. He said he is "fairly optimistic" about the economic fortunes of the U.S. and global markets heading into 2019.
"In the short-term, I'm not super worried about it," Steagall said. "The (Federal Reserve Bank) is managing inflation pretty well. We still have decent growth rates and still have low unemployment (and) firms are still hiring. We're in pretty good shape."