Playing the market at school has other kinds of risks

Staying Ahead

April 01, 2001|By JANE BRYANT QUINN | JANE BRYANT QUINN,Washington Post Writers Group

IN THE schools, your kids are playing stock market games.

I don't mean video games. These are simulations - virtual investing - conducted in class to teach students basic investment and economic concepts. Or they might be the centerpiece of an after-school investment club.

Naturally, the games are pretty upbeat about stocks. Lately, the kids might not be quite as enthusiastic as they were last year!

The oldest and most popular simulation, appropriately called the Stock Market Game (SMG), is sponsored by the Securities Industry Foundation for Economic Education (www.smg2000.org). About 600,000 students played last year.

The nonprofit foundation gets its money from the securities industry, foundations and local groups. The game, backed by 40 state councils on economic education, comes with teachers' guides and lesson plans.

The price varies by state but averages around $25 for a team of three to five kids. With a local sponsor, such as a brokerage, the price might drop to as little as $3.

But the Stock Market Game was slow to develop a workable Web site and fell behind the competition in service and technology.

As a result, 16 state councils now use a commercial site called Stock-Trak, based in Duluth, Ga. (www.stocktrak.com). About 200,000 students play, at $12 to $35 per team, depending on local sponsorship.

In both games, players start with a lovely $100,000 pile of simulated cash. The teams compete by picking stocks. They research their investments on the Internet.

Competitions last for up to 14 weeks. Winners get T-shirts or bragging rights. (These days, a "winner" could be the team that loses least.)

I'm strongly in favor of introducing high schoolers to stock market concepts. The sooner that young people learn financial terms and strategies, and get some practice making decisions, the better they'll do when the money is for real.

As always, however, the quality of the education depends on the teacher and on what, exactly, is being taught.

I have questions, mostly about Stock-Trak.

Bob Mitchell, head of the Maine Council of Economic Education, switched to Stock-Trak from the Stock Market Game a year ago. He chose it for its "technical reliability" and what he calls "fantastic research links."

Those "fantastic links" take students to other investment sites, which Maine assumes will be educational. And a few, such as the Morningstar page, do indeed provide good, general information.

But some sites on Stock-Trak aren't places I'd like my impressionable kids to hang out. Mostly, they're for gunslingers - fast traders - who follow hot stocks. (In recent weeks, they've followed them off the cliff.)

The research links focus almost entirely on current action. There's not much history or long-term perspective.

In my trip through the links, I found out-of-date sites, offers for a book and a newsletter on trading techniques, and sites for brokerages. A Wall Street Journal link was there, but students would have to pay to use it.

But sites do change. A couple of places that bothered me when I first looked were gone the second time around.

Stock-Trak's short summary for teachers piously mentions long-term investing, diversification and mutual funds. But you won't find much about those strategies on the screen itself.

Stock-Trak's Mark Brookshire has heard this kind of criticism before. But he says he chooses sites that are highly rated by consumers or that he's familiar with. "Teachers are always asking me for ideas," he says.

Hmmm. If these are your kids' teachers' best ideas, maybe you ought to call a meeting. Personally, I'd want a V-chip on the Stock-Trak screen.

Mitchell says that the game is only part of an overall program and "has worked for us. It opens up kids to the whole world of economics." The state councils are responsible for developing their own teacher guides.

The competing site - for the Stock Market Game - isn't nearly as much fun. It offers no links to other sites and not much pizazz. You get all your stock information through the SMG site itself.

Spokesperson Donna Haggarty says the site will be improved this year. Still, it's principally a teacher-directed game - long on curriculum materials, lesson plans and discussions of risk vs. reward.

Like Stock-Trak, the SMG doesn't talk much about mutual funds. These games promote individual stocks. The teacher's handbook I saw primarily uses classroom examples of stocks that go up.

As with any classroom project, much depends on the teacher's behavior and understanding of investing. He or she has to bring perspective.

Schools should nix any teacher who begs tips from the class' stock-picking whiz.

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