A previous post questioned the use of stock-market competitions in public schools as a tool for teaching children about investing. An example of one such competition in Canada is the National Secondary School Stock Market Competition. Registrations have begun for the next session, which runs for less than two months — from Feb. 24 to April 16. Bonds are not allowed but stock and index options are.
Stock picking simulations are fine but there are other things to investing that may be getting overlooked –notably diversification, asset allocation, compounding and so on. I received a thoughtful email in response to my previous post, which deserves to be posted here:
I strongly agree that stock picking contests are the wrong way to go when teaching young people about investing. In fact, I would say that I consider the practice more akin to presumptive indoctrination rather than purposeful education. Much of what goes on today is the facile creation of games and contests without even clearly establishing appropriate ground rules for those games in the first place.
As with sex education a generation or two ago, I fear part of the problem is that the teachers dont genuinely know their subject matter very well, and so end up being duped into thinking that investing is about one thing (i.e. stock picking or perhaps market timing) by the industry, when in fact, it is really about other things- diversification, personal risk tolerance and minimizing taxes and costs.
I find it frustrating that many educators say they want to help solve the problem of poor financial literacy among young people and then run contests based on extremely short term (read: random) results. In short, they purport to be part of the solution, when in fact, they merely re-enforce the problem. With friends like that”
John J. De Goey, CFP Vice President Burgeonvest Securities Limited