When does $100,000 become $922,000+?
By Debbie Kerman, Assistant Director, NIU STEAM
So when does $100,000 become $922,000+? When students invest it in The Stock Market Game™ program, a financial education simulation used in thousands of classrooms nationwide to teach students about our capital market system and the long-term benefits of saving and investing.
This fall, a team of twelfth grade students from York High School in Elmhurst, IL, did something I’ve never seen in all my years of coordinating The Stock Market Game™ program in Illinois. Outperforming the S & P 500 by more than 820%, the student team, led by Ryan Pajak and consisting of teammates Ryan Marti and Matthew Huffman, finished the game session having turned their $100,000 virtual cash account into $922,918 over the course of just thirteen weeks.
The Stock Market Game™ program is a product of the SIFMA Foundation. The Illinois Bankers Association is the Illinois provider of the SMG, and we’re thrilled that we’ve been able to partner with them as they offer the program without cost to schools in Illinois.
The Stock Market Game™ program is a perfect fit for us because it lines up with the six learning catalysts that provide the framework for NIU STEAM. Here’s a bit more about what students learn by playing – and how Pajak and his team succeeded so stunningly!
- Catalyst 1: Problem (Project)-based Learning. Unless you plan to work until the day you die, everyone needs to prepare for their financial future. When you’re able to retire and what type of lifestyle you’re able to afford is largely dependent upon how much you save and how well you manage your savings and investments over the long term. Students in The Stock Market Game™ program engage in a real-world investment simulation to learn how our capital market system works and how they can utilize it to their advantage by growing an investment portfolio. Even though the money is not real, stock transactions are processed in real-time prices, reinforcing the real-world experience. Pajak and his team managed their portfolio during the fall semester, beginning September 7 and concluding December 3, 2021.
- Catalyst 2: STEAM Concepts and Content. Students have so much fun learning about companies and markets that they don’t even realize the math, history, economics, research and decision-making skills and knowledge they’re gaining through the process. Pajak’s team used a variety of websites to conduct research and chart the patterns to track the volatility of stocks they identified and placed on a watchlist.
- Catalyst 3: 21st Century Skills. Throughout the game session, students work together in teams to research, build and manage a simulated portfolio of real-world stocks, bonds, and mutual funds. Pajak and his teammates collaborated to determine the best way to invest their funds. They used critical thinking skills to evaluate potential investments based on their personal risk tolerances and predictions about how the holdings might perform. Throughout the day, his team used a text group chat to communicate about what stocks to buy and sell. Working together allowed Pajak and his teammates to share their knowledge with one another.
- Catalyst 4: Growth and Persistence. Sometimes investments don’t perform as expected. When that happens, students can reevaluate whether they continue to retain a holding or sell it off. Every decision has consequences, and students see those consequences first-hand in their portfolio’s performance. As a result of their productive struggle, students discover solutions that help them make sense of their “failures” and learn to see them as part of the process that ultimately leads them to success. One of the take-aways Pajak and his team learned from stocks that performed poorly for them was to average down or add to their holding of the low-performing stock to bring down the average cost of the holding and lower their breakeven point.
- Catalyst 5: Career Connections. The Stock Market Game experience exposes students to a variety of financial service careers, such as securities trader, financial planner, portfolio manager, financial analyst and more. I’m not sure if Pajak is looking into a financial services career. He has certainly demonstrated a strong understanding of what it takes to be successful in growing an investment portfolio. Either way, I’m confident this experience will benefit him as he prepares for his own financial future.
- Catalyst 6: Trans-disciplinary Approaches. Because students have the freedom to research and invest in any stocks and mutual funds listed on the NASDAQ Stock Market and the New York Stock Exchange as well as a variety of pre-determined municipal, corporate, and Treasury bonds, students are empowered to explore options driven by their interests. Pajak credits some of his team’s success to technical analysis, a strategy used by some investors who attempt to predict the future price of a stock using market data patterns. Over the course of the summer, Pajak taught himself to use technical analysis to attempt to predict the future movement of a stock.
Students who participate in The Stock Market Game™ program gain a fundamental understanding of investing through a hands-on learning experience that prepares them for financial independence. To learn more about incorporating The Stock Market Game™ program into your STEAM program, contact Debbie Jemison, Financial Literacy Director, at Illinois Bankers, djemison@illinois.bank.
