Young investors measure their competing returns

| 18/01/2010

(CNS):  With several months still to go before the game is up so far the St. Ignatius Shantastic Krew are leading the investment pack in the Saxon Investment Club groups competition. More than 75 year 10-12 students from Cayman Prep and High School, John Gray High School and St. Ignatius High School started hypothetical portfolios, capitalizing on the opportunity to get hands-on experience investing as they simulate the excitement of the New York Stock Exchange.  To date Shantastic Krew are ahead with a 4.2% return on investment (ROI), followed closelyby St. Ignatius Generations with a 3.6% ROI.  

Saxon described the contest as a platform for young people to experience the realities of the investment world and the students have endured more than two months of gruelling competition as they choose, analyze and hypothetically trade stocks in accordance with real-time stock market information. With portfolio performance being reported on each month, the groups battle it out for the $3,000 grand prize up for grabs, as well as monthly prizes.  

Each group began the fiscal year with $100,000 in their hypothetical portfolio and chose companies based collectively on their interests or research. For the month of December, five groups showed a profit – St. Ignatius Shantastic Krew and St. Ignatius Generations as previously announced, as well as St Ignatius Five Star with a 2.6% ROI, Cayman Prep Group 4 with a 2.2% ROI and Cayman Prep Group 3 with a 0.01% ROI. 

 “The students are now really starting to find their footing in the investment world, learning just how unpredictable and volatile the markets can be – but gaining an understanding of strategies used to ensure the best performance,” said CEO of Saxon Brian Williams. “I am very proud of all of our students – it is a learning curve and they are enthusiastically taking each day at a time, gaining a sound understanding of the investment world.” 

Across the board, group portfolio performance varied between 4.2% ROI and -3.5% ROI. Though not necessarily a significant loss, Cayman Prep Group 2’s disappointing -3.5% ROI can be attributed mainly to the poor performance of Proshares Ultra Gold which took a hit of -$2,989.  

Williams said the groups that made profits had more diversified portfolios which had more stability and performed better. He commented that the groups that had negative returns tended to only invest in two or three stocks. “One of the lessons that the students are learning is that having a wider range of stocks can typically have an overall stabilizing effect as it can counterbalance the poor performance of a single stock,” he added.  

This strategy certainly proved true for St. Ignatius Generations, with the most diverse portfolio boasting over 13 stock investments.  Even though three of their stocks suffered losses, the other 10 ultimately performed to counteract the effect, resulting in an impressive 3.6% ROI.  “The whole point of this club is to provide students exposure to the realities and fast pace of the investment world. Learning from experience is a crucial part of this process – and the groups that made losses are committed to meeting to reassess their strategies to ensure they are better prepared for next month,” Williams explained. 

As well as engaging in real-life trading experiences, students are also being trained to follow the stock markets, using several industry and website blogs. The group discussions lend themselves to garnering a well-rounded understanding of the performance of their investments.   

Williams said the even though some groups might have experienced an overall loss the majority had at least one company they invested in that made a profit. “We are only two months into the programme, and I can already confidently say that each and every student is wiser today than they were yesterday when it comes to the tricks of the trade in the world of investing. The next few months are bound to bring a whirlwind of lessons – and at this point in the game, it is still too early to decipher which group is going to walk away $3,000 richer!”he noted.  

Category: Local News

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