Economics Lesson Sees Real-World Outcomes

Each year, Aaron Gregory’s Economics students participate in the Stock Market Game (SMG), a class-long project through the Virginia Council on Economic Education (VCEE).

Students first learn the basics of corporate finance, financial assets and investment. They then are divided into teams and use the SMG platform to execute purchases of stocks, mutual funds and bonds. It's a competition with regional, state and national levels.

“Obviously, with the volatility of the markets this spring, even the teams who used savvy strategies found themselves doing quite poorly,” said Gregory. “But the students have fun researching reliable companies and making team decisions on investments.”

Students Jasper Garris ’21, Andrew Hair ’21, Samantha Janovetz ’20 and Spencer King ’20 finished in 30th place out of 344 teams in the region!

This spring, the VCEE announced that they would offer a no-cost, prize-free game this summer due to the disruption due to COVID-19.

As a result, four students and one alumna are participating in the summer game, including Libby Snowden '20, David Liu '21, Nathan Tebay '21, Adam Beaver '21, and Josh Stubbs-Yates '21. David is currently in first in the region with a 13% gain on his initial $100,000 he started the game with! The summer game runs until Aug. 14.

 

Economics is a single-semester elective offered to upper school students that allows them to devote in-class time to research, team build and assign roles (each team having a director, reporter, broker and research director) to learn about investments and finance.

“Finance is a significant part of our Economics curriculum, both personal finance and corporate finance,” said Gregory.

Students learn:

• Real-world applications of those lessons
• How corporations raise funds from investors to finance a business venture and return dividends to those investors from the profits
• How the market for those investments expresses itself in indices like the Dow Jones average, etc.
• What it means when we say the market is "up" or "down"
• Reasons for stock price behavior

Students also “find news stories detailing corporate earnings reports, executive hiring/firing/reshuffling, product success or failure, and note how these things affect the price of the stocks they’ve bought,” said Gregory. “Every decision their team makes has to be explained in a report, either with specific research documentation or with knowledge team members already have (e.g. Amazon is a popular investment because students are familiar with it and generally expect the company to perform well). This year, with the market being as volatile as it was, we saw several groups put more of their money into U.S. government bonds as a safer investment. Students learned earlier in the course that it is generally impossible to lose money on a high-rated bond, but also the amount of gain is very low.”

Learn more about the SMG at https://www.stockmarketgame.org/.