Students at this high school learn how to invest with real money

The Gray Bee Investors scouting for potential investments at a recent meeting.

Mike Scanlan

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

This year, the Gray Bee Investors Club — made up of about 15 high school students — is helping make investment decisions for the Grossman Family Student Investment Fund, which was created with a $100,000 donation to the school. of the Grossman Family Foundation.

Grossman decided to give the school the money to reinforce the personal finance education offered.

“Everyone spends money, has checkbooks, debit cards and credit cards, but most people don’t understand the nuances of saving, investing and budgeting,” said Steven Grossman, philanthropist and founder of the Grossman Family Foundation. “It starts with giving them a basic education on personal finance, and then they can drill down into the details of investing.”

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The money is currently invested in a broad-based S&P 500 index fund. The students in the club decide what they would like to invest in and after a vote sell some of the money to buy the assets they suggested.

“It’s more serious than before, but it’s still fun to learn,” said Guitze Rodriguez, 17, a senior at St. Benedict’s and president of the investment club.

Connecting students with graduates working in finance

Gray Bee Investors was established in 2020 by Mike Scanlan, the Dean of Administration at St. Benedict’s.

During the club’s first year, at the height of the pandemic, the group met by videoconference twice a week to learn the basics of personal finance and investing and meet a range of former volunteers. They also played a stock game together.

Connecting current students with alumni working in finance has been one of the benefits of the group’s virtual reunion, Scanlan said.

Mike Scanlan is the Dean of Admissions at St. Benedict’s and Head of Investment Club Faculty.

Mike Scanlan

“They got to see people who looked like them, kids of color, in the investing world,” he said.

St. Benedict’s is dedicated to serving students in Newark and the surrounding area. Nearly 80% of the student population is black or Latino, and 88% receive full or partial scholarships, according to the school’s website.

It was also important to start with basic money management skills, such as budgeting.

“[Scanlan] had a good philosophy of teaching us personal finance before we started investing, even if it was virtual money,” said Davion Cottrell-Miller, 17, a senior at St. Benedict and treasurer of the club. investment.

Real money in play

When the club received the money, Scanlan decided to take a different approach to the stock market investing game.

Students had started playing the investing game during the pandemic stock market decline and so were invested thanks to the record rally to all-time highs.

“They bought at the bottom of the market, so all they saw was gains,” Scanlan said, adding that he and the other advisers were worried that students would think investing was always so easy.

Instead of picking stocks this year, Scanlan and the club’s former advisers asked students to research different sectors they found interesting or thought would be a good investment over time. They did the research with the help of students from the Georgetown University Student Investment Fund.

Having real money on the line has made a big difference for the students at the club.

“Money has made investing different, I take it very seriously,” said Davion Cottrell-Miller, 17, a senior at St. Benedict’s and treasurer of the investing club, adding that working with Georgetown students made him a better investor.

An industry team has concluded that the fund should invest in ETF VanEck Semiconductor based on its expense ratio and past performance. Rodriguez was tasked with presenting to the school’s finance board.

“Never in my life would I have thought of having a meeting with a school’s finance committee,” Rodriguez said, adding that it was a great learning opportunity.

Now the group is preparing for the next finance committee meeting, where they expect to be asked more questions about the performance of their investment. The market and their ETF have seen more volatile performance recently due to factors such as the Russian-Ukrainian war and chip shortages.

“From a portfolio management point of view, I don’t like it, but from a teaching point of view, it’s great,” Scanlan said, adding that the club always talks about investment principles, especially when stocks are down.

Go forward

Granted, the school sometimes offers a personal finance course as an elective, but the course is not available this school year, Scanlan said.

Eventually, Scanlan hopes to be able to pull up to 4% a year from the fund and use the money for school improvements, which the students choose, he said.

The club can move from sector investing to building a balanced portfolio that would model what a young investor might want in their 401(k) plan, he added.

Although the club focuses on investing, it also spends a lot of time reviewing the basics of personal finance. Ultimately, the club’s goal is to give students a place where they can learn how to manage their money, as many don’t learn these skills at home.

“These kids are just as ambitious as the kids who hear about it around the dinner table,” Scanlan said.

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