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Contact: Joe King, NIU Office of Public Affairs
December 9, 2008
DeKalb, Ill. — When the dust settles on Wall Street, the investment companies that are left standing might want to pay a visit to Sycamore High School.
It is there that a team of student investors nearly doubled its money in a few weeks, despite working in one of the most turbulent markets in history. The students invested in stocks related to construction and farming – at a time when many stayed away from those sectors.
Of course, it’s a bit easier to gamble when you are playing with fictitious money, and that is what the Sycamore team was doing, participating in The Stock Market Game. A simulated investment exercise, the game is sponsored nationwide by Securities Industry and Financial Markets Association, Wall Street’s largest trade group. In Illinois the game is administered in Illinois by the Illinois Council on Economic Education, which is a branch of NIU-Outreach. The game is part of ICEE’s efforts to create not only savvy investors, but better citizens with strong personal finance skills.
The performance of the team (one of about three dozen at the school) places it in a league of its own. Out of 3,700 student teams across the state, only 57 teams (about 3.5 percent) were showing a profit as of early-December. Most of those were lucky to be up 10 percent, which pales compared to past years when top teams regularly saw a return on investment of 30 or even 40 percent, says ICEE Program Coordinator Marty Paul.
The tough market that has battered most student portfolios (most professional portfolios too, for that matter) may also have reduced the number of teams competing this year. After a 40 percent increase in 2007, the number of teams playing the game dropped slightly this year.
“We haven’t done the research to prove it, but I suspect the drop-off is mostly due to a decline in teachers who are trying it for the first time,” says Paul. “I think the volatility of the market scared them off.”
Cheryl Maness, who includes the game as part of her Consumer Economics curriculum at Sycamore High School (which includes the state’s leading team) understands that fear. Even in the robust market of 10 years ago she was hesitant about taking the plunge. Now she can’t imagine teaching without it.
“It’s a tremendous cross-curriculum program. It requires students to do research, critically evaluate information, apply computer skills, convince teammates – it pulls together a lot of different things,” says Maness.
Maness reports that students on teams that are not faring well are still enjoying the game, albeit not as much as when the market was booming. Paul is hearing similar reports from other schools, but she is doing her best to remind everyone that there may be more to be learned in tough times than in good.
“This is a great way for a new generation of investors to learn the ropes in one of the most challenging markets in history. In the game they can take risks and try plays they probably would never dream of; and at the end of the day, they are out nothing. So I hope more teams jump into the game when we begin a new round in the spring.”
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