Stocks for sell time horizon in May? (High school Economics project)

[MomTo2Boys]

Hey, guys, I think I actually posted a question like this years ago when my older son was at a school that did this exercise, but now my younger son is doing it (in the same type of school) and I'm interested to hear y'all's take.

Okay, so here's the exercise, and it is NOT PP friendly (not my fault! I didn't make the ground rules!), but I still would love to hear what you think:

My son is a senior in high school in an Economics class. Each student gets to invest $1,000 in a stock or stocks of their choice. The sell time horizon is in May (at the end of the school year). If, at the end of the year, a profit has been made overall by the Economics class, then each kiddo gets to keep his or her profit. If there is a class loss, then no one gets to keep their profit. They do not have to personally absorb any losses.

The kids can ONLY invest in stocks, and sin stocks are not okay. Unfortunately, no bonds or gold.

Some kids have already chosen what they want to invest in, like Chipotle or Nike, and their choices are in the process of being bought. My son has yet to choose and is interested to hear what you guys think.

[curlew]

Hey, guys, I think I actually posted a question like this years ago when my older son was at a school that did this exercise, but now my younger son is doing it (in the same type of school) and I'm interested to hear y'all's take.

Okay, so here's the exercise, and it is NOT PP friendly (not my fault! I didn't make the ground rules!), but I still would love to hear what you think:

My son is a senior in high school in an Economics class. Each student gets to invest $1,000 in a stock or stocks of their choice. The sell time horizon is in May (at the end of the school year). If, at the end of the year, a profit has been made overall by the Economics class, then each kiddo gets to keep his or her profit. If there is a class loss, then no one gets to keep their profit. They do not have to personally absorb any losses.

The kids can ONLY invest in stocks, and sin stocks are not okay. Unfortunately, no bonds or gold.

Some kids have already chosen what they want to invest in, like Chipotle or Nike, and their choices are in the process of being bought. My son has yet to choose and is interested to hear what you guys think.

If they really want to teach the students about investing they should do something like I saw on a 20/20 piece by John Stossel (I think) a long time ago - have a monkey throw darts at a blackboard and compare his pick with theirs (in other words, some kind of random choice). As I recall, the monkey came out ahead in that experiment. The result might not be replicated but even if the monkey beat half of the guesses it might be an eye-opener for the youngsters.

[ochotona]

I mean... they should pick all stocks that have high seasonailty effects that peak in May, right?

Go to http://stockcharts.com/freecharts/

choose the Seasonality chart

then they should just systematically study as many stocks as they can, at least the Dow 30, or top 50 of the S&P500 and see which ones have high returns during the desired periods

I would study at least 100 stocks. It could be done in a few hours.

[Kriegsspiel]

Throw a dart at the SP500. Then go learn to code or play outside.

[MomTo2Boys]

These are all such awesome suggestions. You guys are just fantastic. Love this forum.

[WiseOne]

Is a passive index fund one of the choices? If so, I'd advise your boys to buy one, either an S&P 500 or total stock index fund like VTI. If not, then make sure that the results are compared to the performance of one of the indexes. It'll be a nice lesson for the class at the end of the year.

If you are constrained to buy an individual stock, then I echo the suggestion for the dart board approach. If the passive vs active fund historic performance is anything to go by, it will actually be superior to any stock-picking method - as the monkey experiment also shows.

[barrett]

Have your kid pick three or four stocks that might teach little lessons. So they can choose an oil stock in case we see a gas spike in the next six months, a pharmaceutical that may be profiting from family members who use one of their meds, and maybe Walmart because they/you likely do some shopping there. Incidentally, FWIW, my great parenting ideas rarely worked with our daughter!

[MachineGhost]

I vote for the monkey throwing darts. That's the kind of visceral things kids like and makes it a lot more fun and interesting than a bunch of boring numbers in a newspaper or web site.

There's also this app: https://itunes.apple.com/us/app/stock-p ... d495510614

[stuper1]

Maybe try a Dogs of the Dow approach. Look for high-quality stocks that have been down for the past 12 months and are due for a return toward the mean.