NCPA - National Center for Policy Analysis

Learning Stock Market Lessons

March 10, 1998

When teachers are free to set curricula in private schools -- rather than being bound by the dictates of public school bureaucracies -- interesting things can happen. At the parochial St. Agnes Grammar School in Arlington, Mass., seventh and eighth-grade students are immersed in the intricacies of stock market trading.

Under the guidance of Wall Street investment guru Peter Lynch, teacher Joan Morrissey hammers home the necessity of thorough research in investing.

  • Her students are divided into competing teams and allowed to invest in 10 stocks with $250,000 in play capital.
  • Since May 1, 1997, one group has achieved a return of 57 percent -- almost twice the gain of a nearby professional broker.
  • One stock they picked after careful research, Ethan Allen Interiors, has returned more than 132 percent, while three other stocks have returned more than 60 percent.

Lynch thinks the course should be a model for other schools and has prepared a teacher's guide on investing for interested schools.

A study published by the National Bureau of Economic Research found that adults ages 31 through 50 who went to high school in the 14 states that require personal finance courses save 1.5 percent more of their income and build a net worth equal to one more year of earnings compared to those who graduated in other states.

Morrissey reports that in addition to accumulating knowledge about investing, students learn the broader principles of economics and sharpen their skills in math.

Source: John Berlau, "Readin', Writin', Relative Strength," Investor's Business Daily, March 10, 1998.


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