It’s not too early for Hawaii students to learn about finances because what they grasp now will last them a lifetime.

That’s the attraction of the Hawaii Stock Market Simulation, an interactive program that allows students to manage their own financial portfolio by buying and selling stocks at real-time prices.

"In the real adult world, dealing with finances is what every person, family and organization must not only deal with, but must learn to control," said Stan Herder, a teacher at Hawaii Baptist Academy. "Being financially literate can help one reach important goals in life. Lack of basic financial literacy can lead to losing control of basic aspects of one’s life and being controlled by others and circumstances."

In the Hawaii SMS Stock Market Simulation, students in third through eighth grade statewide spend class time, lunchtime, after-school time, and even weekends researching the stock market, brushing up on economic indicators, and applying their new knowledge to their own portfolios. The program helps students learn how the U.S. market system operates by encouraging the students to think about setting goals and saving the money they need to reach those goals. It also introduces them to the discipline required to become successful investors.

The program is administered by the Hawaii Council on Economic Education in partnership with the Department of Commerce and Consumer Affairs, Office of the Securities Commissioner.

Teams of two to four students invested a hypothetical $100,000 in stocks, bonds and mutual funds over a 10-week period that ended Nov. 22. They prepared for their investments by following world markets, reading the business section of local and national newspapers, discussing current events in class, and researching market trends. There were 600 teams comprising 1,584 students and 27 teachers who participated in the fall trading session from 20 schools and organizations across Hawaii.

"I have had my students participate for several years," said Lurline Choy, a teacher at the all-girls Sacred Hearts Academy. "I strongly believe that females need to have financial independence. Each year the girls come with different ideas about investing. It’s always interesting to read their investment journal entries and note their frustrations over what to select."

Throughout the simulation, students worked together to ensure that their portfolios were balanced while competing against the market.

"My group started the Hawaii SMS as a class assignment and surprisingly it was a lot of fun," said Seann Kailio, a senior at Sacred Hearts Academy, whose team placed second overall in the Income/Growth Division. "We checked and contributed to our account every day in class. I even checked on the weekends."

Fellow Sacred Hearts student Alyssa Abelaye, whose team placed first in the same division, said, "In the beginning I was scared but my teammates helped me understand what was happening. We divided up the work. Two did research on bonds and the other two checked out stocks. We shared our findings and made decisions as a group."

Abelaye’s teammate, Jewel Taitano, concurred it was a group decision.

"If we lost money for two days, we looked at the company and voted on whether to keep it or not," Jewel said. "Sometimes we bought more of the company at the lower price but we never bought something back once it was sold."

Teams also made decisions on how to manage their portfolio.

"We decided to sell Toyota and Honda when their returns were lower," said Kaden Baptista, a fourth-grader at Holualoa Elementary School on Hawaii island. "We replaced it with Wal-Mart and Verizon, which returned gains."

Kaden, along with teammates Gabe Harris, Cheyenne Leanio, and Guadalupe Cisneros Valdovinos, placed second in the state in the Elementary Division.

"We learned how to have more participation on our team for all of us to work together," Gabe said.

Teachers and students regularly monitored the results.

"We were surprised to hear that we were in second place," said Tiare Libarios-Moses, a Sacred Hearts student and member of the second-place team in the Income/Growth division. "Our stock kept going up and down. We would be ahead on Wednesday and be behind on Friday. Guess that’s the way of the market."

Holualoa Elementary School fourth-grader Sita Hale expressed equal surprise and excitement after his team placed first in the Elementary Division.

"I was surprised to find out our team came in first place in the state," Sita said. "It makes me feel proud and awesome. My parents thought it was awesome and good for my education because when I grow up and I want to invest money, I’ll know how."

Hawaii Baptist Academy seniors Jolie Ayabe and Micah Pascual had a slightly different experience when they found out that their team placed first overall in the Growth Division.

"When our teacher told us to stand up because we won, I originally thought, ‘Oh, we’re in trouble,’" Jolie said. Micah added, "When Mr. Herder told my team to stand up for recognition in class, I immediately thought, ‘What did we do now?’ But it end up being good news. Yay!"

Although students compete for prizes and bragging rights, there is a lot more at stake when teaching them the important skills of saving, investing and money management, according to Karen Harris, a teacher at Holualoa Elementary School.

"Even though our keiki are young, it is our responsibility to teach and coach them (on) main concepts," she said. "For example that maxim, ‘Money doesn’t grow on trees.’ I remember when my child saw me receive cash back at Costco when he was younger. He had to ask why that happened. For a while he thought the store was just giving back money for shopping there."

Hawaii Baptist Academy teacher Robert Fusato echoed this sentiment.

"The Hawaii SMS has been an excellent way for students to get realistic experience investing, and it’s really nice to see students excited about learning," he said.

NEXT CONTEST

The spring Hawaii Stock Market Simulation will begin on Feb. 10 and end on April 18. Teachers are invited to attend both a basic investing workshop and an advanced investing workshop on Feb. 15 at HawaiiUSA Federal Credit Union’s main branch at 1226 College Walk. These workshops help teachers understand and become more comfortable with leading their students through the simulation. Both workshops are free. Neighbor island stipends are available. Visit www.hcee.org or call 536-6304 for more information.

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Toni Takeno is executive director of the Hawaii Council on Economic Education.