Investment Advice From Kids

The sixth graders at Ariel Community Academy on Chicago’s South Side have been watching the financial crisis more closely than most of their peers. That’s because they have been managing their own real-life investment portfolio since they were 6. The school, founded by the money management firm Ariel Investments, starts kids off with $US20,000 in first grade. What the kids make of it is up to them.

“There’s this sense that right now for kids in America this is a teachable moment that can be used in a profoundly good way,” says Mellody Hobson, president of Ariel Investments, “to help them live within their means and also to understand the ups and downs of the stock market.”

The economy is bad. The kids’ portfolio, which will eventually be used for local charities and the kids’ own college tuitions, is down 40 percent from last year. Should they sell?

Not according to these kids.

“[The decline] doesn’t really change my opinion of th stock market because stocks are a real risk-and-return thing,” says 11-year-old Max Tabb. “It’s good to buy stocks, but you should be aware that they can crash down at any time.”

Other investment advice from these pre-teens:

“I wouldn’t trust the stock market right now,” says 11-year-old Diamond Coleman. “One minute it’s up, and one minute it’s down.”

“Stocks are cheaper now,” says 11-year-old Josh Fallis. “When they get to a higher price, you actually make more money.”

“Everybody needs to wash up, they don’t want to stink the rest of the day,” reasons 11-year-old Deja Barnes, who suggests investing in personal hygiene and clothing companies. “And they need to buy clothes, because they don’t want to go outside naked.”

Sounds logical to me.