By Lori Berkes-Nelson M.S.Ed., President, Econ Illinois.
I had not heard the word “economics” until I was in high school, and then it was attached to Consumer Economics and I walked away from that class with an understanding of how to write a check and how to keep a checkbook balanced – both very important skills as I became an adult. But, what if I had been taught the economic way of thinking from the time I was in kindergarten? If I had understood “opportunity cost” when I was in grade school or scarcity when I was in high school or compounding interest rates when I graduated college, perhaps I would have been better-prepared to avoid debt.
The InvestWrite program was designed to help students sharpen critical thinking skills as they compose essays on investment related topics. The program builds a bridge between classroom learning and potential real-world investment decisions. Students are provided a topic and an investment scenario, which requires them to assess, research, and then formulate possible solutions based on their own findings, logic and ideas. Perhaps if I had been exposed to this type of program I would have understood as this Illinois 5th grader, Dayton, does…
“You need to do your homework before investing, have a diversified portfolio and expect the unexpected. At first glance, a company may appear to be a good investment. By digging deeper into the management philosophy and business strategy, however, you may uncover a path that is not in line with the current state of the industry. This could lead to a decline in stock value. Having a diversified portfolio helps to offset some risk. If stock in one of the industries you are invested in starts to decline, hopefully the stock of other industries will have positive results to offset the loss. There are unforeseen events that could happen to change the value of stock, such as a CEO leaving, investors panicking and selling off or over investing in stocks, or natural disasters. Don’t overreact to unexpected and temporary swings in a stock value. If you’ve done research and diversified investments, being patient and making well thought out decisions regarding your portfolio should yield positive results over the long term.”
Dayton took 6th place in the competition this fall. He has four classmates who took spots in the top 10 in the nation including 7th, 5th, 2nd and 1st place. These 5th graders are more financially literate than some adults in their understanding of the stock market and how best to make decisions about money. “I wish I’d known that!”
InvestWrite winners from Illinois (l-r) Rachel, Mollie, Dayton,
Luke and Nicholas with their school mascot.