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The Annual Stock Market Game

Updated: Sep 5, 2019

My wife, Jodie, and I had three children in 30 months. Max is 16 months older than Henry, who is 14 months older than Annabel.

Like many siblings, they are competitive with each other. As if being so close in age weren’t enough to make them competitive, I started encouraging them compete at random life skills at an early age. I didn’t do it intentionally; it was a parenting survival method. Have you ever tried to feed, dress, and potty three toddlers (usually in that order)? “First one to put their coat on wins! First one to finish their chicken nuggets wins!”

It worked so well, I decided to use their competitive nature to help them learn other things as well, like the stock market. What better way to get their attention than a friendly family competition! My love of the stock market dates back to a 7th grade teacher that enrolled our class in a stock market game, so why not try it with my kids?

That was the idea 5 years ago when we started THE ANNUAL STOCK MARKET GAME. I am happy to say, it has been a HUGE success in helping our kids learn about the stock market.

Each year on the Tuesday after Labor Day, the contest begins and then runs through the Friday before the next year’s Labor Day. Why do we run it this way? To coincide with the beginning of the school calendar year (smart answer) and I came up with the idea on Labor Day weekend (correct answer).

Rules of the game:

Choose two stocks to hold from the beginning to the end of the contest period with no changes allowed once it begins.

We simulate a portfolio of 50 percent in each stock. The portfolio that has the highest return after the 12-month period is the winner.

I have a small trophy made for the winner that includes the two stocks they selected and the rate of return for the hypothetical portfolio.

Every Labor Day weekend, we settle the returns from the previous year’s contest and pick the stocks for next year.

Below are the results of our 4 contests from 2014 – 2018. (The results for 2018-19 are in – but the finish was so dramatic they will get their own post).

2014 – 2015:

1. Annabel +20.0% – Rite Aid (RAD) and Disney (DIS)

2. Henry +11.3% – PetSmart (PETM)* and Apple (AAPL)

3. Max -4.9% – Southwest Air (LUV) and Ford (F)

SPY -2.2%

*PETM was taken private during the contest and the proceeds stayed in cash.

2015 – 2016:

1. Max +4.9% – Microsoft (MSFT) and Target (TGT)

2. Henry +0.9% – Best Buy (BBY) and Target (TGT)

3. Annabel -5.8% – Disney (DIS) and Netflix (NFLX)

SPY +15.2%

2016 – 2017:

1. Annabel +42.2% – Disney (DIS) and Netflix (NFLX)

2. Max +35.5% – Nintendo (NTDOY) and Google (GOOG)

3. Henry +25.8% – Microsoft (MSFT) and Google (GOOG)

SPY +15.4%

2017 – 2018:

1. Max +73.5% – Amazon (AMZN) and Apple (AAPL)

2. Annabel +57.3% – Netflix (NFLX) and Facebook (FB)

3. Henry +21.6% – Apple (AAPL) and Facebook (FB)

SPY +19.4%

Max and Annabel with the "Hardware"

It has been a wonderful way to teach the kids about the stock market and stock picking. I honestly think that my kids care more about the contest than they do their real money portfolios. (Talk about “first world problems”). Maybe I’ve pushed this “competitive” thing a little too far…

I’m not sure how I escaped the scrutiny of participation in this game. I mean, that wouldn’t be fair, right? I’m a professional! (Sarcasm intended). Up to now, I have been able to avoid the humiliation of likely being beaten by one (or all) of my kids. However, beginning in 2018-2019, Mom and Dad began participating in the contest as well. (The trophy will still go to the winner of the contest between the three youngest kids. The bragging rights on those trophies are far too powerful a force to dare disrupt.)

What happened in 2018-2019? Drama to the LAST DAY – with a lesson for ALL OF US about the risk of buying stocks. Stay tuned for the next post to hear “the rest of the story”.



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