Stocks 'R' Us: Teaching Your Kids about the Stock Market Gives Them a Jump-Start on Investing

By Middleton, Timothy | Black Enterprise, May 1993 | Go to article overview
Save to active project

Stocks 'R' Us: Teaching Your Kids about the Stock Market Gives Them a Jump-Start on Investing


Middleton, Timothy, Black Enterprise


Teaching your kids about the stock market gives them a jump-start on smart investing.

Next time you hear a 16-year-old kid talking stocks, listen up. Especially if it's Terrance O. Davis.

Last December, the junior at William Howard Taft High School in San Antonio, Texas, used the analytical skills he'd sharpened in his advanced math, English and computer classes to monitor Wisconsin Pharmacal Co. Inc. The precocious student was betting that Wall Street pundits were wrong in their belief that the government would soon approve Pharmacal's new contraceptive device. The teen's strategy? Sell his $200,000 worth of shares in a risky move called "shorting," then scoop them back up as the stock price plunged. In a matter of days, Pharmacal went from $20 to $15 per share--netting Davis a handy--if imaginary--$42,880 profit.

"You have to take risks," says Davis, whose Christmas coup helped him land top honors in the nationwide AT&T Collegiate Investment Challenge. By the end of the three-month contest, Davis had outwitted 1,800 high school students, growing his $500,000 play-money portfolio to $984,340, for a stunning 97% gain. Not only did he beat his closest competitor by $225,000, but he clobbered the Dow Jones industrial Average, which eked out a mere 4.5% in the same period.

While stock-picking tykes like Davis may not be in the same league as Warren Buffet, they're well on their way. As part of a national drive to make young Americans more proficient in economics and finance, programs such as the AT&T Challenge are surfacing from coast to coast: At least a half-dozen full-blown stock games are being played nationwide today. Even better, more and more black finance pros are sponsoring progams of their own, steering youths to the stock market--and great careers.

So whats in it for your child? A leg-up on money management, for starters. Today, despite sagging interest rates, African-Americans are still less than half as likely as their white counterparts to invest in common stocks. "We just haven't been as aware of the alternatives that the stock market offers, and we're more reluctant to expose our capital to risks," sums up Alan Bond, president and chief investment officer of New York City-based Bond, Procope Capital Management.

Adds Charles Ross, host of Your Personal Finance, a nationally syndicated radio program, "No matter how you cut it, if you want to build wealth, you need to be involved in the stock market."

No one knows that better than stock specialist Bond. "When I was 10 years old, my family went to Disney World," he recalls. "When we got back, my parents said, 'We've got $5,000 to put in the stock market; what should we buy?' I said I thought we should invest in Walt Disney, because it was so much fun, and Delta Air Lines, because it flew us there, and GM (General Motors Corp.) because we had rented one of their cars." Good thing his parents listened: Over the next decade, those three stocks soared, and helped pay for Bond's four years at Dartmouth College.

Today, Bond shares his market smarts with inner-city youngsters. For six years, he has sponsored "A Day On Wall Street," a program that introduces sixth-graders to the stock market. The adventure, which includes a visit to the floor of the New York Stock Exchange and lunch in its ornate, beaux-arts boardroom, helps teach youngsters that the products they use can open the door to investments and profits.

Based on his own childhood experiences, Bond, now 31, encourages kids to "invest in names they know," such as Reebok, Blockbuster Entertainment, Apple Computer, Nintendo, Delta and Johnson & Johnson. (For more on this approach, see "The Power Of Investing In What You Know," December 1992.) But his young charges don't place bets on a whim. Under Bond's program--which includes about 70 students from New York City-area public schools--kids "buy" their imaginary stock only after they've done careful research.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Stocks 'R' Us: Teaching Your Kids about the Stock Market Gives Them a Jump-Start on Investing
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?