Summer Camp for Aspiring Investors
Andre McCain was determined to have eBay in his portfolio, but his investment partners thought any Internet stock was too risky. "You need to take some risk in order to succeed [in investing]," McCain argued. "I think eBay will be around for some time because it's auctioning used products, and we are in a low economy." After a few more days of discussion, the team finally agreed to invest in eBay but only to make it 10% of the portfolio, not the 15% McCain wanted.
We hear debates like this on TV, read about them in finance magazines, maybe have them with our spouse, broker, or partners in an investment club. But McCain's was different: He is 14, a tenth-grader this fall at Edison Friendship Academy in Washington, D.C., and his two partners are 14 and 15. They were among the 14 students in a five-day pilot camp last August designed to acquaint kids with the basic concepts and vocabulary of money management and investing.
The camp, held on the campus of George Mason University in Fairfax, Va., was run by YoungBiz, an Atlanta for-profit company that markets programs and products aimed at introducing kids to entrepreneurship, and the National Association of Investors Corp. (NAIC), an organization based in Madison Heights, Mich., that sponsors investment clubs. The participants, who paid $400 each, ranged in age from 11 to 16 and came mostly from the D.C. area. There were no requirements to join beyond a willingness to learn. Some campers had already shown a knack for business, such as 15-year-old David Tyler of Knightdale, N.C., who designs T-shirts that he sells to schoolmates. Others, such as Jason Garcia, 14, had never even heard of The Wall Street Journal until they came to camp.
The curriculum for the all-day sessions ranged from how to set financial goals to creating a balanced portfolio. On the first day, campers picked five companies whose stocks they followed for the rest of the week. To track their companies--and test their understanding of such concepts as the price-earnings ratio--the campers spent a half-hour first thing each morning perusing The Wall Street Journal with the help of their teachers, Bonnie Drew and Brad Dodson. Drew, who also oversees YoungBiz publications, and Dodson, a former public school teacher, made liberal use of board games, including a version of Who Wants to Be a Millionaire that focuses on investment questions.
The big goal of the week was for each of four teams to create a portfolio by choosing from 32 stocks and 10 mutual funds and present their decisions to a panel of judges made up of members of local investment clubs. To make their choices, they read research from Morningstar and Value Line. Ummat Muhammad, 11, a seventh-grader at Hyde Leadership School in D.C., espoused a 20% stake in Johnson & Johnson for his team. "There's going to be growth," he argued. "Everyone needs their products--dental floss, baby powder."
DIVERSITY WINS. But it was McCain's team, the "Roc-A-Fellas," that won the competition by justifying their allocation of 20% each in General Electric, Home Depot, and J&J, 30% in Oppenheimer Global Fund, and the 10% in eBay. "The judges liked the fact that the team was going for a more diverse portfolio by accepting a little more risk," says Drew.
At week's end, the kids headed home with a leather organizer, a one-year membership in NAIC, and $20 to start an investment account. The campers maintained 100% attendance throughout the five days, and "we had to go home and add material to the curriculum each night," says Dodson, because the kids exceeded the teachers' expectations. Encouraged, YoungBiz (www.youngBiz.com) will offer camps next summer in Atlanta, Houston, New York, Orlando, and the San Francisco Bay area, as well as D.C. Campers will be divided into two groups, ages 11 to 13 and 14 to 17.
The children's families were pleased as well. Tyler's grandmother, Earline Wilkinson, a retired government employee, plans to give David and his cousin and fellow camper, Britni Rhett, 14, money each month to invest. Learning from pros how to manage money, says Wilkinson, is "an opportunity I never had."
By Ellen Hoffman