The Shares4Schools competition pits teams of sixth-formers against each other, making their own trading decisions and investing real money
The best way to teach children about money is to let them manage it hands-on. For younger children, pocket money and savings accounts make a great start, but how do you teach older kids about more complicated financial concepts such as investing, the stock market, risk and reward?
The answer for the Share Centre is simple: give them real money to invest in real shares. Each year the investment platform does just that with its Shares4Schools competition. Teams of sixth-formers (Year 12) are given £2,000 to invest in shares in October, then in May the profits are calculated. The school that makes the most money wins.
The chairman and founder of the Share Centre, Gavin Oldham OBE, says: “When we started Shares4Schools the only investment competitions available for students were virtual, and therefore treated as inconsequential games. Introducing real money being invested has brought a real focus, so that the student team is working together in the same way as an investment club. It also ensures that all the ‘real world’ aspects of owning shares – dividends, corporate actions, different market liquidity and so on – are fully reflected.”
Schools get to keep their profits and the winning team and runners-up are also invited to a prize-giving ceremony in the City of London.
This year the event took place at Mansion House, the official residence of the Lord Mayor of London, where teams also got to meet respected fund managers including Alistair Mundy, manager of Temple Bar Investment Trust, Alexandra Jackson, manager of the Rathbone UK Opportunities Fund and Richard Penny, a fund manager at Crux Asset Management.
After the presentation, fund manager workshops and a panel debate, the overall and regional winners were then treated to a James Bond-style high-speed boat ride down the Thames.
Following what can only be described as a similarly high-octane finish, the winning team this year came from Marine Academy in Plymouth. At the start of the final day of trading the school was languishing in 15th place, but after one last-minute trade it ended in top position. The share they bought was Webis Holdings, a company that operates in online gaming, whose value soared on the back of new legislation in the US permitting sports betting for the first time.
Over the competition period the 10-strong team, who were all studying for their Certificate in Financial Studies (CeFS), managed to boost their starting investment of £2,000 by an impressive 19.7%.
In addition to Webis, the team also traded shares in Aviva, RSA, WPP, 3i, Share plc, Sky, BT and BP.
For Marine Academy, stock selection was very much a collaborative process. “We all went away to research companies and then took a tally. Whichever company got the most votes was the one we picked,” explains team member Thomas.
During his presentation at the awards ceremony Mr Oldham spoke of the lessons he had learnt as an investor, and one of the key messages he wanted to impress on students was the adage “Time spent on reconnaissance is rarely wasted.”
Whether you’re choosing a company for a share portfolio or a managed fund for an Isa or pension, it’s always better to do your homework and research your choices, instead of acting on a tip-off.
The successful teams also learnt that hard work and commitment pay off. Students at St Bartholomew’s in Newbury, the winning school for the south-east, were invited to form a team as part of their economics A level class, but all their meetings were held at lunchtimes or after school. Plenty of share talk happened between meetings too, using social media to debate ideas. By investing across an array of shares, students were also given the opportunity to think about diversification – another lesson Mr Oldham was eager to impart. “Avoid concentration risk,” he advised.
The team at St Bart’s, as the school is known, noted that if they had only invested in their most profitable holding, Ocado, their overall portfolio would have made more money.
Given the aim of the competition, there did seem to be an element of regret; nonetheless, the team realised that would have been a risky approach. Invest in too narrow a range of shares, and if one performs badly it could have a devastating effect on the overall portfolio.
While Marine Academy won the competition, riding high on the back of a successful last-minute trade, the team did experience the pain of a bad trade, and even emailed their teacher while he was off sick to instruct him to sell a slumping BT before it lost them any more money.
St Bart’s has been participating in the competition for a number of years. Economics teacher Denise Seward says it provides a valuable experience for the students. “I don’t get involved at all,” she says. “The decisions are all theirs, and if they are prepared to put the time in, they come out with a really good knowledge of the stock market, as well as lessons in decision-making and risk-taking.”
Many of the students entered the competition because they had an eye on a City career. One student at Tettenhall College in Wolverhampton (the West Midlands winners) was planning to study at the London School of Economics with a view to becoming an investment banker. Others recognised the benefits it would bring them on a personal level, while another student at Tettenhall, who was headed for a career in biomedical sciences, said she’d be using her new-found skills to save for the future and invest in a pension.
Aaron, another member of the Marine Academy team, says the experience has proved useful from a career and a personal point of view. “It’s been a bit of both,” he explains. “I’ve learned a lot about shares and how to invest in them, as well as the best ways to choose and compare them. I would like to get a job in finance, so this has been a good platform for that.” Unsurprisingly, the victory has given the team an appetite to invest. “Investing is a good way to make money,” he adds. “It is higher-risk, but then the returns are better.”
For Ben at St Bart’s, the competition has whetted his appetite for a career in fund management. “My interest and aims have grown throughout the competition,” he says. “At the start it was pitched to me in an economics lesson and I thought it sounded pretty cool, but as the competition went on and we became more successful, I started to think I would quite like to do this as a job.”
His teammate Grace is more interested in a career in human development, but both feel the experience has taught them some vital life skills. Grace says: “I’ve realised how important it is to invest well and use your money, not just for the short term but for the long term too.”
Ben, meanwhile says that the lessons he’s learnt in stock selection can be applied to many parts of life.
“You have to be prepared to work and research if you want to succeed in life,” he says. “Even with decisions like which university you go to, you need to research the course and you can’t be satisfied with your decision unless you have looked up every aspect of it and know it will go well for you.”
The next Shares4Schools competition runs from 29 October this year to 29 June 2019. More information is available at Shares4Schools.co.uk.
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