Kaktovik youth earn big in virtual stock market
Wall Street is a long way from the North Slope Borough, and one teacher is helping rural Alaska students learn how to navigate the complicated maze of the stock market.
Glen Sobey of Harold Kaveolook School guided eight students to high rankings in a national stock market contest that reaches more than 60,000 youth across the country. The three student teams from the school in Kaktovik earned top Alaska honors in the Capitol Hill Stock Market Challenge. The only rural school to enter the contest in Alaska, Sobey's students were the highest ranked out of 24 teams in the state. One team ended up in the top 10 percent of teams across the United States [--?253 out of 4200. The contest ended May 9.
The Capitol Hill Challenge, founded as in investment education program by the Securities Industry and Financial Markets Association (SIFMA), matches U.S. senators and representatives to student teams competing in The Stock Market Game. Student teams manage a hypothetical $100,000 online portfolio and invest in real stocks, bonds, and mutual funds?
The top 10 teams in the country receive a trip to Washington, D.C. to meet their member of Congress and other experts to learn about fiscal policy making, the role of capital markets, and global economic trends. Harold Kaveolook School recognized the local students in an assembly.
Kaktovik's involvement began when Sobey offered a personal finance class last semester, with stock market investing as one of the components. Students used a stock analysis report from Morningstar Investor and focused on stocks identified as selling below their value. Normally, people invest in the stock market with long-term goals, Sobey said. The contest, however, precludes a more conservative timeline, so the students needed to take risks and hope for significant short-term goals.
"We decided to focus on stocks with prices of under $50 a share, thinking that they would be the most volatile and had the highest chance of rising (of course, of falling as well)," Sobey said.
The students, all working with the same report, chose the stocks with the highest gap between price and value, and cost [--?but also had risen in value during the previous months. Sobey also advised them to choose exchange-traded funds (EFTs). Tenth-grader Austin Kayotuk and ninth-grader Jonas MacKenzie ended up with the highest return in the school.
"Ironically, the boys chose the fewest stocks and funds simply because they took more time to decide and then enter the sales," Sobey said. "Fortunately for them, the ones they did not choose happened to decline, or not increase very much. The other two teams' portfolios has the same investments as the two boys, plus a few more."
Tenth-grader Justine Simmonds and ninth-grader Georgianna Tikluk earned second-place honors. The third place team consisted of 11th-grader Tori Inglangasak and 10th-graders Chelsea Brower, Frances Kayak, and Mandi Gallagher.
Sobey said the contest was a unique learning experience for the students.
"Hopefully, they learned that saving and investing are good choices for money rather than spending it all," Sobey said. "We spent much time in the class looking at the growth of money in various ways over long periods of time and how choices made while young can be very beneficial for them in the future. They also learned why companies issue stock, why people and organizations buy shares, why some companies offer better investments than others. They looked at earnings and price to earnings ratios. They also learned that big-name stocks are not always the best investments."
Sobey said the students enjoyed keeping track of their portfolios and celebrated when they learned that they ranked so high in Alaska and the country. The other Alaska teams to enter were from Fairbanks, Anchorage, and Wasilla. Sobey doesn't plan to offer the personal finance class during this school year, but may include participation in the program as part of his U.S. History class in the spring.