Buy, Sell, Wait

We wrapped up our Stock Market unit at Group of Four this week with a simulation game.  We (the mums) invented five companies, some blue chip, some up and coming.  We had a bank, an airline, a power company, a spa and a department store with creative little names  like “Trusty Trusty Safe Bank” and “StuffMart”.     Ahead of time we had decided on ten days of closing prices on the Group of Four Stock Exchange (GOFSX) and then graphed the first four days. Each child was given $300 and the charts necessary to keep track of their stock portfolio.

We opened for trading at the day 4 prices  and the children chose what they would like to buy based on what they could see on the graph and their own opinion of the companies.  No-one spent all their money and all but one bought from several different companies.  At the end of each day’s trading (we had six days) we helped everyone update their portfolio sheets making sure that they knew  how much their stocks were currently worth.  The graph was updated before the new day’s trading began and when the market opened the children noted down the new prices and began trading.

The prices had been determined by us ahead of time so did not reflect the buying and selling that was going on amongst the group, but we had  tried to make the path of each stock realistic for the type of stock it was.  The power company stayed very steady, the spa rose dramatically and then crashed, finally going bankrupt on the last day.  On the fourth day of trading there was a news flash explaining that there had been some terrorist attacks in the US.  That day all the stock prices dropped, some more dramatically than others.

At the end of trading everyone tallied up the worth of their stock and cash in hand.  The profits ranged from $10 to $130, no-one ended up with less than they started.  Everyone discussed the strategies they had used, the mistakes and the successful choices they had made.

The unit  went very well overall.  Although it was a topic very few of them knew anything about, we incorporated enough games to keep everyone interested and to simulate the real thing.  One of the most valuable parts of each lesson was the discussion time as the children tried  to come to grips with the concepts of stewardship and investment.

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2 thoughts on “Buy, Sell, Wait

  1. ND

    I was fascinated by the recent exercise in which you have involved the Group of Four, exploring the workings of the stock market. It was interesting to note that all the players made some gains over the period of the exercise, even though there were large differences between the lowest and the highest gains.

    You have addressed the concepts of stewardship and investment, and I wonder what insights the Group of Four have gained. I wonder, too, whether the concepts of speculation and risk were considered, and whether some types of companies were preferred investments rather than others.

    This is an extraordinary and almost unique time to be exploring the workings of the Stock Market with a group of children. I wonder whether the exercise was able to simulate the huge devaluation of stock that has occured around the world in recent times, and what impact this had upon the understanding of the Group of Four.

    It seems to me that you have developed a simulation that could be a significant learning opportunity for many adults as well as your wonderful Group of Four.

    Congratulations!

    ND

    Reply
  2. Heather Post author

    All the students were quite cautious investors in both games we played, but in the last game they did more selling as they realized that a gain is a gain, however small. Understandably there was quite a bit of discussion about the current economic situation, how it is affecting the stock market and the community.

    When we began the unit at least one student thought that if they had money to spare they would just hold on to it. That prompted discussion about ways to invest money, because not everyone will invest in the stockmarket, and about deflation and inflation.

    Reply

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