Boeing? Delta Air Lines? Spirit Airlines?
Which company’s stock will take off over the next three months?
That’s what four middle-school students at Toledo’s West Side Montessori were trying to figure out last week.
Libby Stupica, Parker Caesar, Leen Yassine, and Benjamin Theis were busy on their computers, trying to pick four stocks that would do well over the next three months.
They and their classmates are competing in The Blade’s annual School Stock Contest, which gets under way this week.
Teacher Tom Strong had divided his students into six teams of four people. They will be among more than 150 teams competing in this year’s contest.
Libby, Parker, Leen, and Benjamin were putting together a diverse portfolio. They had chosen General Electric Co., Tesla Motors Inc., and American Eagle Outfitters. They were planning to add an airline stock.
Benjamin said he’d been studying Tesla and thought there was a good chance the stock price could either rise or fall substantially. He said he was willing to take a chance that the movement would be positive.
Parker said she chose American Eagle because people will be buying spring clothes, and the company did well last spring.
Libby said she has been watching GE since last year’s contest, and she thinks it is ready to move upward.
Leen said she liked Boeing Co. because of recent news about the company and because she thinks airline stocks will do well in the spring. But she was also considering Delta Air Lines Inc. or Spirit Airlines Inc.
All of the teams have picked four stocks that are selling for at least $5 a share. Each team gets a mythical $40,000 to be divided evenly between the four stocks. They will have one chance — midway through the 12-week contest — to exchange one or more of their stocks for another stock. At the end of the contest, the team whose portfolio has grown the most will be the winner. The winning team will get $250 for the students and $250 for the school. The second-place team will receive $250 for the school, and third place gets $100 for the school. Prizes may be cash or gift certificates.
The contest is sponsored by The Blade’s Newspaper in Education program, the Taylor Automotive Family, Fifth Third Bank, and the University of Toledo, which calculates the results.
The standings will be published each Tuesday in The Blade and on www.toledoblade.com/business starting on March 11.
Fifth Third Bank experts have been visiting classrooms to teach students some of the basics of investing.
“Fifth Third Bank wants to empower people financially, and we focus our community efforts on providing people with the financial tools, knowledge, and access they need to be successful,” said Ronald Belle, senior vice president and investment advisors division executive.
“Having the ability to earn a living, to manage finances responsibly, and to save income for future goals is important to everyone. Programs like the School Stock Contest introduce students to investing and reinforces sound financial principals early. This creates a pillar that can be built upon as the child grows and learns and becomes financially empowered,” Mr. Belle said.
Mr. Strong, who teaches math and social studies to the seventh-graders and eighth-graders at West Side Montessori, said the contest helps his students in a variety of ways.
He has them graph their stocks to keep track of their highs and lows. They use their math skills to figure out how many shares of a certain stock they can buy.
“You always get that question in math: ‘Why do we need to know this?’ This is like a real-life application. They are applying what they are learning to real life.”
His teaching colleague, Mary Brandon, points out that the contest helps students realize that current events can affect companies and their stock prices.
One of their teams last year finished sixth out of 115 teams. Others finished in the middle of the pack. One finished near the bottom of the standings.
Mr. Strong said students learned last year that one stock can do severe damage to a portfolio, even if the other three do well.
Some of the West Side Montessori teams were trying to apply another lesson learned last year.
“We are trying to make [our portfolio] more diverse,” Michielle Bland said.
Her teammate Maddy Vesoulis said her team last year made the mistake of having too many apparel companies. When the industry slumped, so did the team.
Ryan Gannon said the same thing happened last year when his team chose too many food-related stocks. Last week he was studying how Nintendo Co. Ltd. had done in various three-month intervals “because that’s the time frame of the competition.”
Students had various reasons for choosing stocks.
Claire Kohler said she suggested Chipotle Mexican Grill to her teammates because she likes the company’s values, including using chicken that is raised naturally.
T.J. Fidler pushed for Nike Inc.
“I’m a very big fan of their apparel,” he said. “I think it’s nice clothing, and you see lots of sports teams have the Nike logo on their uniforms.”
Trying to pick stocks that will do well over a 12-week period is slightly different than trying to make investments that will help secure your financial future over decades.
But there are lessons to be learned.
“This is a three-month contest, and we often see the students picking stocks because they like the company or the product produced,” Fifth Third’s Mr. Belle said. “Picking stocks in real life is not entirely different from that; we should buy companies we believe in.
“The experts at Fifth Third Bank are providing some guidance to the students before they pick their stocks, and we recommend that all investors seek sound, expert advice on any investment. A trained financial adviser can provide professional guidance to build an investment portfolio specific to each individual’s long-term goals,” Mr. Belle said.
Last year, a team from Springfield High School won the contest. During the 12 weeks of the contest, its mythical $40,000 portfolio fattened to $48,622. That increase of more than 21 percent far exceeded the 4.6 percent rise in the S&P 500 and the 5 percent growth in the Dow Jones Industrial Average during the same period.
Contact Chip Towns at: email@example.com or 419-724-6194.