Markets In Action

In the Capitol Hill Challenge, Students Win

What would you consider a good annual rate of return on your personal investment portfolio?

 

8 percent?

 

20 percent?

 

How about over 80 percent?

 

That is exactly the results a group of students at Canyonville Christian Academy in Canyonville, Oregon, achieved during this year’s Capitol Hill Challenge.

 

The Challenge is part of the SIFMA Foundation’s Stock Market Game (SMG) program, which engages students in a real-world simulation of the capital markets and investing in stocks, bonds and mutual funds. Every year, 600,000 students across the U.S. participate in the Stock Market Game program to learn more about how investments work and how their ownership of stock can provide economic benefits to the companies they invest in.

 

The Capitol Hill Challenge has become the preeminent national financial education competition for middle and high school students in America. During the Challenge, teams of three to five students manage a hypothetical $100,000 online portfolio and invest in real stocks, bonds and mutual funds. Every school taking part in the Challenge partners with a member of Congress.

 

This year, the teams certainly didn’t disappoint their legislative partners. For example, at the close of this year’s Challenge, students at Canyonville Christian Academy turned $100,000 into a portfolio valued at $185,888.92.

 

While these gains are only on paper, the method behind achieving them is very real. The Capitol Hill Challenge reinforces the importance of financial education for young Americans. Students who participate in the Challenge are provided with classroom lessons and a curriculum that requires them to research and respond to economic indicators, industry trends and other factors that drive investments. The simulation conveys the importance of long-term saving and investing in a practical, hands-on way. Through the SIFMA Foundation’s Invest it Forward initiative, participating educators and students can also access in-person insights from financial professionals related to the capital markets, good financial habits and the economy. Combined with an early start in managing their own financial lives, it could lead to big dividends for students in the future.

 

In fact, according to Wharton professor and Nobel-winning scholar Jeremy Seigel’s influential book Stocks for the Long Run, investments in stocks and bonds bring greater returns than other assets such as gold or real estate.

 

The program ensures students grasp the global economy and develop positive personal financial skills. Additionally, an independent study found that students who take part in the Challenge score higher on mathematics and financial literacy tests than their peers, setting them up for success in life as well as in finance.

 

The competition’s rewards are enticing, too. The top ten teams with the highest-ranking portfolios travel to Washington, D.C. The trip serves to not only expand students’ experience with how the American economy works, but also offers them the chance to share their success with some of the top leaders in the country.

 

The SIFMA Foundation’s Capitol Hill Challenge is more than just a competition. It is proof that an understanding of capital markets is certainly within reach — and vital — for all Americans.

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