I teach personal finance to high school kids and have likewise been wary of some of the stock picking games. They can send the message that stocks are risky and you have to know what you are doing to invest. I do play one game called build your Stax, which uses real historical data to simulate a 20 year time frame. The index fund wins 90…
I teach personal finance to high school kids and have likewise been wary of some of the stock picking games. They can send the message that stocks are risky and you have to know what you are doing to invest. I do play one game called build your Stax, which uses real historical data to simulate a 20 year time frame. The index fund wins 90% of the time. I like to teach that long term investing is very easy, anyone can do it, and it beats the professionals most of the time.
Yeah, Stax is a great game which I highly recommend. But I'm not sure that it's designed to teach more than just one thing: "choose the index fund." How do you teach the rest of the things that I list in the letter, which I think a stock simulation does?
I teach generally what stocks, bonds, and mutual funds are. The stock market the games probably do teach some other skills on analysis and risk assessment, but I come down on the belief that picking individual stocks is a fools game that involves more luck than skill. I make the analogy that individual stocks are like gambling at a casino. It can be fun and sometimes you win, but don't bet more than you can lose.
I agree with you I don't think it is encouraging kids to be risky investors, I do think it can send the message that investing takes special knowledge and skill and so they will just avoid it when they are adults.
I think presented correctly, the games could have value, but I think they are at cross purpose with some of the other lessons I am trying to teach.
I teach personal finance to high school kids and have likewise been wary of some of the stock picking games. They can send the message that stocks are risky and you have to know what you are doing to invest. I do play one game called build your Stax, which uses real historical data to simulate a 20 year time frame. The index fund wins 90% of the time. I like to teach that long term investing is very easy, anyone can do it, and it beats the professionals most of the time.
Yeah, Stax is a great game which I highly recommend. But I'm not sure that it's designed to teach more than just one thing: "choose the index fund." How do you teach the rest of the things that I list in the letter, which I think a stock simulation does?
I teach generally what stocks, bonds, and mutual funds are. The stock market the games probably do teach some other skills on analysis and risk assessment, but I come down on the belief that picking individual stocks is a fools game that involves more luck than skill. I make the analogy that individual stocks are like gambling at a casino. It can be fun and sometimes you win, but don't bet more than you can lose.
I agree with you I don't think it is encouraging kids to be risky investors, I do think it can send the message that investing takes special knowledge and skill and so they will just avoid it when they are adults.
I think presented correctly, the games could have value, but I think they are at cross purpose with some of the other lessons I am trying to teach.
Appreciate that.
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