The students of this high school are learning to invest with real money

Gray Bee investors are investigating a possible investment in a recent meeting.

Mike Scanlan

There is real money for the investment club at St. Benedict Preparatory School in Newark, New Jersey.

This year, the Gray Bee Investors Club, which consists of about 15 high school students, will help make investment decisions for the Grossman Family Student Investment Fund, which was established through a $ 100,000 gift from the Grossman Family Foundation.

Grossman decided to give the school money to boost the proposed personal finance education.

“Everyone spends money, has a checkbook, debit cards and credit cards, but most people don’t understand the nuances of saving and investing and having a budget,” said Stephen Grossman, a philanthropist and founder of the Grossman Family Foundation. “It starts by giving them simple information about their personal finances and then they can learn more about the details of the investment.”

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The money is currently being invested in an extensive S&P 500 Index fund. Students at the club decide what they want to invest in and after voting vote to sell some of the money to buy the assets they offer.

“It’s more serious than before, but it’s still fun to learn,” said 17-year-old Gitze Rodriguez, a senior fellow at the St. Benedict Institution and chairman of the investment club.

Connecting students with finance alumni

Gray Bee Investors was founded in 2020 by Mike Scanlan, dean of the St. Benedict administration.

In the club’s first year, at the height of the pandemic, the group met twice a week with video calls to learn the basics of personal finance and investing and meet with a number of alumni. They also played together in the market.

Connecting current students with finance alumni was one of the advantages of a real group meeting, Scanlan said.

Mike Scanlan is the admissions dean at St. Benedict and the head of the investment club’s faculty.

Mike Scanlan

“They need to see people like them, colorful kids in the investment world,” he said.

St. Benedict is dedicated to serving students from and around Newark. According to the school’s website, about 80% of the student population is black or Latin, and 88% are on full or partial scholarship.

Getting basic money management skills, like budgeting, was also important.

“[Scanlan] Before he started investing, he had a good philosophy of teaching us personal finance, even though it was virtual money, ”said 17-year-old Devion Cotrell-Miller, a St. Benedict senator and treasurer of an investment club.

Real money at risk

When the club was given the money, Scanlan decided to take a different approach from the stock market investment game.

Students began to invest in the stock market during the pandemic, and therefore invested in record gains to record highs.

“They bought at the bottom of the market, so everything they saw was profitable,” Scanlan said, adding that he and other advisers are concerned that students think investing is always easy.

Instead of collecting shares this year, Scanlan and alumni alumni of the club forced students to explore different areas of interest or thought it would be a good investment over time. They conducted the research with the help of students from the Georgetown University Student Investment Fund.

Having real money in the game made a big difference for the students of the club.

“The money changed the investment, I take it really seriously,” said Devion Cotrell-Miller, a 17-year-old senior fellow at St. Benedict and an investment club treasurer, adding that working with Georgetown students motivated him. a better investor.

One sector group concluded that the fund should invest in the ETF VanEck Semiconductor because of its cost-effectiveness and previous performance. Rodriguez was instructed to submit to the school’s financial board.

“I never thought in my life that I would meet with the school finance committee,” Rodriguez said, adding that it was a good learning opportunity.

Now, the group is preparing for the next meeting of the finance committee, where they expect to be asked more questions about their investment performance. The market and their ETFs have been more volatile in recent times due to factors such as the Russia-Ukraine war and the lack of chips.

“From a portfolio management standpoint, I don’t like it, but from a training standpoint, it’s great,” Scanlan said, adding that the club is always talking about investment principles, especially when stocks are declining.

Forward

Of course, the school sometimes offers a personal finance class as an elective, but that class is not available during the school year, Scanlan said.

Finally, Scanlan hopes to raise up to 4% of the fund each year and use that money to improve the school, he said.

The club could move from sector investment to a balanced portfolio that would exemplify what a young investor wants in a 401 (k) plan, he added.

While the club focuses on investing, it also spends a lot of time learning the basics of personal finance. Finally, the purpose of the club is to accommodate students so that they can learn about money management, as many are unable to learn these skills at home.

“These kids are all as ambitious as the kids who hear about it at the table,” Scanlan said.

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