QoD: How many of the 12 largest companies in 2000 were still one of the largest 12 in 2018?
Answer: 4
Exxon Mobil went from #2 to #11
Wal-Mart Stores went from #6 to #12
Microsoft went from #7 to #3
Johnson & Johnson went from #11 to #9
Questions:
Compare the list in 2000 to 2018. Write one sentence that describes how the economy has changed in the past 18 years based on changes in the largest companies. Which industries have grown the most?
How many of the top 12 companies on the list in 2018 are you familiar with?
How has the value of the three companies that...
Chart of the Week: Company Lifespan on the S&P 500
From Innosight's research on Creative Destruction:
Key insights include:
The 33-year average tenure of companies on the S&P 500 in 1964 narrowed to 24 years by 2016 and is forecast to shrink to just 12 years by 2027 (Chart 1).
Record private equity activity, a robust M&A market, and the growth of startups with billion-dollar valuations are leading indicators of future turbulence.
A gale force warning to leaders: at the current churn rate, about half of S&P 500 companies...
Interactive Monday: Stock Trading Game a.k.a. Can You Trade Individual Stocks?
Hat tip to Christian for discovering this interactive from Bloomberg that will get those day traders in your classroom excited.
Here's the game unfolds:
A stock price chart for an undisclosed company scrolls across the screen for 30 seconds.
When you want to buy the stock you hold down the touchpad. You release the touchpad when you want to sell.
You have the opportunity to make repeated buy/sell decisions during the course of the 30 seconds.
At the conclusion of the...
Interactive Monday: How Soon Can I Retire?
We all know how difficult it is to get kids to think about investing for retirement but also know how important it is to convince them to start investing ASAP given their youth and the magical powers of compound interest. So, what's the hook? What young person doesn't dream of retiring early which is kind of ironic given that many of them have these thoughts before they even have their first job. Stay with me. This focus on early retirement, which has gained more prominence recently with the...
The Psychology of Investing: Avoid Stupid Mistakes, Play STAX
Hat tip to Vadas at Abnormal Returns for pointing out this article from Behavioral Investment about why we make stupid investment decisions.
The article lays out nine reasons why normally rational, thoughtful people make what he describes as "sub-optimal" investment decisions. As I read through the list, I realized how our investing game STAX (over 160,000 game plays since November launch) gives students an opportunity to make a lot of stupid decisions which they hopefully will learn from...
2018 Holiday Reading List
Our holiday reading list is a bit longer than our usual list….it will have to last you two weeks! We hope you have a little down time to dig into some of the longer articles on the list. Enjoy your break and Happy Holidays to all!!!
Personal Finance
Experian reportedly will begin including utility payments in the credit score calculation, giving millions of people who only use debit cards a credit history/score. (WSJ)
With all of the changes in the tax laws for 2018, here is a...
Whipsaw Risk and Investing in Stocks
How do you think recent investors in GE are feeling about their decision?
Would you hold on after a monthly drop of 30% in the stock price?
Interesting read from the Capital Speculator here about how investors can be influenced to act impulsively in the early years (I think it could be days) of a new investment. As someone who can speak from experience, there is nothing worse than seeing a recent investment go negative soon after your purchase. The bubble thoughts that start floating...
How Can I F.I.R.E. Up My Students About Retirement?
Looking for ways to get your students thinking about retirement? Introduce them to the F.I.R.E. Movement! That is the Financial Independence Retire Early Movement.
Why do I think this movement is important:
It's a counter-narrative to our consumerist society by focusing on extreme savings. We read so many stories about maxed out credit cards, why not expose your students to tales of young people saving 60-70% of their income?
It helps students understand the concept of passive income and...
Question of the Day: Over a recent 15 year period, what percent of professionals investing in large companies "beat the market?"
Answer: Only 8% (All Large Cap Funds vs. the benchmark S&P 500)
Questions:
Why do you think professionals struggle to "beat the market?"
Why do you think investors continue to invest their money with professionals despite their record of not being able to "beat the market?"
Your friend says "you are better off investing with professionals instead of buying a simple index fund (e.g., S&P 500) that matches the market return." Do you agree or disagree based on the data above?
Click...
NGPF Podcast: Tim Talks to Investor and Educator Paul Merriman
Paul’s passion for educating others about investing stems from his encounters with people who believed they couldn’t do it themselves. As a successful financial advisor, Paul had an unorthodox strategy to grow his business. He wanted to educate his clients so well that they would no longer need his services (and put him out of business). Needless to say, word of mouth spread about this incredible educator/financial advisor which ultimately led to a successful sale of his...
STAX: The Newest Game to Teach Investing
Earlier this week, NGPF and McKinney launched STAX, a game that will teach students that sometimes the best investment strategy is the simplest.
We built STAX after hundreds of conversations with educators, whose top 10 list of features included:
Easy to implement in the classroom: Teachers who beta tested STAX generally spent less than an hour prep time before using with their students. A Teachers Guide provides details on the mechanics of the game as well as helpful...
FinCap Friday: Who Wants To Be A Billionaire?
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Oct 25, 2018
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FinCap Fridays, Investing, Current Events, Index Funds
The lottery has captured the imagination of our country this week. Lots of daydreaming going on...what would I do with....? We know that only one person walked away with the $1.5+ billion prize in South Carolina (identity still unknown). What your students may not realize is that a lottery ticket is not the only way to become a millionaire. Yanely shares her tips on what it will take to be a millionaire by the age of 60 without having to invest in the next Apple or Tesla. Enjoy!...
NGPF Podcast: Tim Talks to Financial Writer and Analyst Nick Maggiulli of Ritholtz Wealth Management
Nick Maggiulli of Ritholtz Wealth Management writes a blog, Of Dollars and Data, which combines his love of markets with his gift for writing about finance in interesting ways. He makes difficult financial concepts more approachable to the masses using anecdotes and analogies that even finance newbies can understand. Yet, his blog also draws in finance experts who find value in his thought-provoking analysis. I’ve cited quite a few of his articles in the NGPF blog, and I...
FinCap Friday: Playing With F.I.R.E.
How can you possibly engage high schoolers in a conversation about retirement? They haven't even gotten their first real job yet so it's not exactly on their radar screen. By highlighting the F.I.R.E. movement (that's Financial Independence, Retire Early) and the extreme examples of retirees in their 30s, we hope that gets your students thinking "How'd they do that?" That should spur a great conversation about savings rates and the importance of investing while you are young. ...
NGPF Podcast: Tim Talks to Author and Blogger Jonathan Clements
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Sep 21, 2018
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Podcasts, Index Funds, Investing, Behavioral Finance
Jonathan Clements is no stranger to the NGPF podcast (here and here), and he’s back to introduce his newest book, From Here to Financial Happiness: Enrich Your Life in Just 77 Days. This book elicits active participation from the reader from day one of their financial journey until the last. Readers will answer 31 questions in their quest for financial happiness including such toughies as...
If money were no object, what would you change about your life AND
When was the last time you...
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