What follows is a list of some things that I hope to help him get his head around… The importance of diversificationĪt first, he was focusing in on finding that one “right” company. In fact, his savings account has built up to the point that I’ve been planning on teaching him about “real” investing sometime soon (though we’ll rely on index funds as opposed to individual stocks). Despite these limitations, I decided that this would be a good opportunity to start imparting some wisdom. While I’m thrilled that they’re talking about this stuff in fifth grade, I wish there was a better (more realistic) way of teaching kids about investing - one that wouldn’t send the wrong messages. In fact, I’d be willing to bet that the winner will be someone who chooses a single stock that happens to perform exceptionally well. Thus, on order to perform well in this game, you have to choose stocks that will perform exceptionally well over the next few weeks/months, as opposed to focusing on what really matters. When I asked him how long the game would run, he wasn’t sure, but it’s not terribly long. The rules are that they have $100k to invest, they can’t buy stocks that cost less than $5/share, and they have to buy at least 100 shares of each company. When I asked him what he was doing, he told me that they’re playing a stock market game at school, and he needed to find some good companies. I came home last night to find our ten year old sitting at the computer looking up stocks on Yahoo! Finance.