Big Apple History . Lesson Plans . Play the Market

	Play the Market


		5-8 (middle school) economics, mathematics approximately four weeks

To help get a better understanding of the volatile nature of the stock market, in this activity students will participate in a hypothetical experiment. For four weeks, students will track the ups and downs of 10 stocks they have selected. After this month, students will discuss their imaginary gains and losses and share their observations about the stock market, and their reactions to this experience.

Begin by having your students read the articles "The Boom," "The Crash," and "Economic Collapse."

Lead a class discussion. You may wish to ask questions such as:

When and why did the stock market get started? Whose idea was it?
Was the creation of the stock market intended to provide opportunities for all citizens? Did some segments of the population benefit more than others?
During the late 1920s, why did so many people invest their life savings in the stock market, even though they knew it was a risky venture?
What are some of the dangers of investing in the stock market? What are some of the possible benefits?

Lead a class discussion about what the stock market is. Discuss what factors can cause "bull" and "bear" markets. Explain that at the start of this activity, each pair of students (or small group) has an imaginary $10,000 to invest in the stock market. Ask them to use business magazines from the library as well as online resources to help them write down a list of 10 companies they might consider investing the imaginary money in.
Each of the pairs (or groups) selects 5 of the 10 stocks and writes a short rationale for their selections. Divide the imaginary $10,000 among these stocks. Students should be reminded to select carefully as they will have to live with their decisions for a month.
Students then use an Internet site such as YAHOO! finance research (http://finance.yahoo.com) to track these five stocks over the period of a month.
Each day for four weeks, students keep a logbook or a printed-out chart from the YAHOO site, noting the price of each stock. They can also note the degree of change from the previous day ( e.g. +5/8, -2 ). At the end of each week, have a class discussion about gains and losses and other observations related to the stock market.
At the end of the month, see which groups made and lost the most imaginary money on the stock market. What surprises did they find? What did this experience teach about the stock market and students' reactions to this experience?

Play the Market

By pretending to play the stock market, you have learned more about how this major financial institution works. In particular, you've seen how the stock market can be a chancy venture -- at times it can make individuals wealthier; but at other times, people can rapidly lose a fortune.