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Experiences as a 4-H youth investor
From time to time, parents comment about the cost of feed for animals or making things for 4-H projects. Sometimes that is followed by a “Well, it is still cheaper than sports” type of comment. Hopefully most are doing 4-H to experience a fun way to learn life, career and interpersonal skills.
But what if you could learn to invest and actually make money via the 4-H program?
Well, that has actually been happening. For the fourth consecutive year through school programs, youth have had the opportunity to learn with investing experience using mutual funds, stocks, bonds, crypto and relative to a traditional savings account.
There were 88 Putnam youth who were virtually given initial funds of $100K to invest. These students started back in the fall with opportunities for making trades. These students have seen a lot of market conditions in this very short time.
Students learned about ticker symbols, risk management, diversification, dividends, capital gains, sectors, the Rule of 72 for doubling funds, realized versus unrealized gains/losses and the grid of capitalization with value to growth focuses. It is so important to understand that placing funds in an account that pays an interest rate of 0.05 percent, when inflation runs seven percent per year, that it results in a loss of buying power of 6.95 percent each year.
The goal of the program is to help students learn to save and to grow savings wisely through being successful investors. Time is such an important aspect of investing.
Too many are scared of investments due to lack of knowledge. This program gives students knowledge through hands-on skill development to become more powerful investors. Future goals still includes developing a youth or family investment club that would actually manage real fund dollars.
As of this writing, the top investor gained 66 percent with their account and owned (numbers in parentheses reflect return plus/minus for specified stock/fund) Nividia (111 percent), Meta (57 percent), Duke Energy (13 percent), Walmart (eight percent) and Microsoft (27 percent). This student only made seven trades and owned five different stocks and did very well. Often students experience the importance of being engaged with investing compared to not investing at all.
There were 47 students who chose to invest in stocks, mutual funds, etc., who did better than simply keep funds in a savings account. Conversely, there were 11 youth who invested and did not perform as well as someone who simply held their funds in a savings account. There were also 11 students with double-digit gains that were also greater than 15 percent, six with gains between five-10 percent during this short period that spanned six months. There were only seven students who experienced a loss. These losses ranged from 0.7 percent to 9.7 percent, reflecting a pretty good outcome for being in the market.
Most adults are scared or uninformed about the science and methods of investing. While one does not want to place all savings into stocks and bonds for example, history shows that it pays to have some exposure. While it is a very important statement that history is no guarantee of the future, it also important to learn from history.
If your class would like to participate in a future event, contact the Extension office to schedule. Additionally, the goal is to develop a 4-H investment club, so please contact Mark Evans at the office if you would like to become involved either as a volunteer or a participant.
Visit www.extension.purdue.edu/putnam or contact the local Purdue Extension office at 653-8411 for more information regarding this week’s column topic or to RSVP for upcoming events. It is always best to call first to ensure items are ready when you arrive and to RSVP for programs.
Upcoming Events
May 27 – Extension office closed for county holiday
June 3 – ServSafe food manager course and exam in Montgomery County, register at https://cvent.me/vNk1k9 by May 27
June 19 – Extension office closed for county holiday