Young Investing Pro Touts the Importance of Research to Generate Long-Term Returns
New York, NY, March 9, 2023 – Benjamin Franklin once said, “An investment in knowledge pays the best interest.” Maddie McCarty is getting a head start in investing. Now in 8th grade at Colby Middle School in Colby, Kansas, McCarty pored over her research into the financial markets to build an investment portfolio geared for long-term financial success. McCarty’s approach led to a thrilling achievement in the SIFMA Foundation’s Fall 2022 InvestWrite competition.
McCarty competed among thousands of other students around the country to write the best essay about long-term investing and the capital markets in the middle school division. McCarty and her teacher, Brandi Jones, were honored by the SIFMA Foundation and the Kansas Council of Economic Education during a school presentation on March 9, 2023.
SIFMA Foundation’s InvestWrite national essay competition bridges classroom learning in math, social studies, and language arts with the practical research and knowledge required for saving, investing and long-term planning. It also serves as a culminating activity for The Stock Market Game™, a curriculum-based financial education program that challenges students to manage a hypothetical $100,000 online portfolio of stocks, bonds, mutual funds and cash over a semester or school year.
SIFMA Foundation’s programs are proven to increase participants’ test scores in math and economics, encourage students to think more about budgeting and financial planning, enable them to work in teams to build their interpersonal social-emotional learning and better prepare them for college and careers. The SIFMA Foundation is committed to closing the opportunity gap by fostering greater knowledge of the financial markets for young people of all backgrounds, with a focus on underserved youth.
“I am thrilled to congratulate Maddie, her teacher and their school,” said Melanie Mortimer, President of the SIFMA Foundation. “Through participation in the Stock Market Game and InvestWrite, Maddie has acquired insights and gained confidence to embrace financial opportunities, research and make informed financial life decisions, and achieve better financial life outcomes.”
McCarty says picking the ‘right’ stocks is based on doing the work: “When buying stocks, you can explore your boundaries and go out of your comfort zone. This can be a lot of fun if you are doing it right! To get more familiar with the stock market you can read articles and do research. After getting more familiar with stocks you will be able to understand the good and bad characteristics of why the stock is failing or succeeding. Learning about all the different tools that are available can help you choose stocks that are ‘right’ as George Soros would say.”
The Stock Market Game and InvestWrite are offered in Kansas through the Kansas Council for Economic Education. “We honor and congratulate our InvestWrite winning student and teacher,” said Charlene Nichols, Executive Director of the Kansas Council on Economic Education, “Helping Kansas students better understand our economy, our markets, the role of investors, and how to make good investments will pay dividends for the students, their education, and the Kansas economy.”
The Fall 2022 InvestWrite competition presented the following challenge to 4th-12th graders –
There are valuable research sources to help you make informed choices when developing your Stock Market Game investment portfolio. Discuss what you think are the most important things to research and use those to select a portfolio of stocks/bonds/mutual funds you think will be successful in the long-term. Explain why your selections will make good long-term investments.
McCarty captivated the panel of thousands of expert judges from across the financial services industry with a thoughtful and insightful essay.
Winning Essay by Maddie McCarty …
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros.
Stocks are when you buy a fraction of a company you choose to invest in. When buying stocks, you can explore your boundaries and go out of your comfort zone. This can be a lot of fun if you are doing it right! To get more familiar with the stock market you can read articles and do research. After getting more familiar with stocks you will be able to understand the good and bad characteristics of why the stock is failing or succeeding. Learning about all the different tools that are available can help you choose stocks that are “right” as George Soros would say.
While participating in The Stock Market Game, I used several different resources and tools to help me find the best stocks to purchase. First, I looked up popular brands that I thought would do well in the future of the stock market. Then, I did more research on the brand I chose by reading articles about why the company is failing/succeeding and how they’re expected to do in the future. I used Yahoo! Finance to get a better visual of how that company has performed. This website consists of graphs, links, and news about the different stocks. Finally, I asked adults that have bought stocks what they think would be successful and why. I think reading articles and doing research is the most important tool you can use to find and buy good stocks. I believe this because you can get different points of view and opinions on what makes a good stock. You can get a wider understanding of what will make a stock valuable.
Next, I selected a portfolio of stocks that I believe will be successful long-term. The stocks I chose are the following: JPMorgan Chase and Co, Tesla Inc, Goldman Sachs, Berkshire Hathaway Inc, and Vanguard High Dividend Yield Index Fund. I selected these stocks for my portfolio because I believe the tools I used gave me useful and factual information.
The tools I used to select my portfolio included doing research, reading articles, and using Yahoo! Finance. These research tools helped me identify successful stocks by giving me different sources of information such as why the company is succeeding and what will make it a good long-term stock. This is important so you can have something to attest to when looking back on why you bought a certain stock. I found information on why the stock has done better than others and what factors make it better. Finally, I used Yahoo! Finance to get a good visual understanding of how the company has done. For instance, if they have had a gradual rise or decline over a period of time.
These are the reasons I believe these stocks will be successful. JPMorgan Chase and Co. is the largest bank in the U.S. However, it is down 29% this year because of inflation and the pandemic. Although, the bank is expected to benefit greatly as more of its interest-earning assets (stocks) will be higher than its interest-earning liabilities (bank loans), benefiting their net interest income level. I believe Tesla will become a successful stock because some cities like California are looking at only selling electric vehicles by 2035. Tesla management believes its company can grow deliveries by 50% annually over the long term. The company has a target of 20 million vehicles annually by 2030. Elon Musk also believes Tesla could eventually be worth $4.4 trillion. Goldman Sachs is a global investment banking, securities, and investment management firm that is trading 24% below its all-time high, which isn’t as poor as some of the other stocks after the recent downfall. The company has also had a steady rise over the last month with few drops. I believe Berkshire Hathaway will be a good long-term stock because Warren Buffett and his team invest in good companies that have good value such as excellent management, strong competitive advantages, and good margins and financials. Berkshire Hathaway has gained 13% over the last 10 years. Berkshire has had its ups and downs but because of what Buffett looks for in a company I believe this will be a successful long-term stock. Lastly, Vanguard High Dividend Yield Index Fund is a good balance between yield and risk. It has had a gradual rise in value over the last 16 years.
Now, you may be able to identify the “right” stocks to purchase after learning more about the tools you can use to do research in the stock market. Learning about stocks and finding similarities and differences will help you understand the difference between a good and bad stock. You can continue to use graphs, read articles, Yahoo! Finance, and explore more websites to help you do research. Understanding the tools available will help you choose stocks you think will be successful in the long-term. You may even have a bit more fun if you are successful and make money on your investments.
About the SIFMA Foundation
The SIFMA Foundation is committed to closing the opportunity gap by fostering greater knowledge of the financial markets for young people of all backgrounds. Drawing on the support and expertise of educators and the financial industry, the Foundation provides financial education to strengthen economic opportunity across communities and increase awareness of the benefits of the global marketplace. Since 1977, the Foundation’s most notable program, The Stock Market Game, has guided more than 22 million students on their path to financial independence by attaining stronger life skills, improving academic achievement, and boosting their social-emotional learning. For more information on the SIFMA Foundation, visit www.sifma.org/foundation.
InvestWrite® is a culminating activity for Stock Market Game students extending their classroom learning with a written challenge to address real-world financial issues and situations. Students must analyze, think critically and problem solve about a long-term saving and investing scenario. More than 260,000 student essays have been evaluated by their teachers and over 40,000 financial professionals have served as volunteer judges. Essays are judged by financial professionals who volunteer their time each year to ensure young people are exposed to the essentials of personal finance early in life. Judges evaluate students’ understanding of long-term investing, diversification, the global capital markets, and factors that drive investments as well as their expression of investment ideas in essay form. Winners locally and nationally rise to the top to earn exciting awards including laptops, classroom pizza parties, trophies, plaques and banners, and certificates.
For more information about InvestWrite®, visit www.investwrite.org.
About the Kansas Council for Economic Education
The Kansas Council for Economic Education, a nonprofit organization housed at Wichita State University’s Barton School of Business, provides Kansas K-12 students with the economic knowledge and financial skills needed to thrive in the dynamic economy. By providing quality training and up-to-date resources, the Kansas Council for Economic Education partners with teachers and school divisions to help students develop decision-making skills needed to be informed consumers, productive employees or innovative entrepreneurs, thoughtful investors, and reasoned voters. For more information, visit www.kcee.wichita.edu.