A question. How much do you know about the stocks you buy? A lot of people don't know much. They buy a stock because somebody else told them it's a good one. We went into the classroom to learn how to evaluate an investment. We did it with a group of teenagers and they're making money -- real money.
Under the guidance of the financial team of Jordan Rosenberg and his father, Sheldon, from Baird Securities in West Bloomfield, two teams of students at Temple Israel in West Bloomfield have been tracking the progress of the stocks they bought back in November of 2011.
And while many people their age are talking about fantasy teams, this is not a game. They're using money, real money from the Temple's youth organization plus some of their own. These young investors are putting their real money into real companies.
"We're looking at nearly a 40-percent return in six months. That is incredible," said Jordan Rosenberg.
And so it's part investing class and even part current events.
The Jewish Student Investors Group or JSI discussed the recent disclosure that 70-percent of ground beef in the country contained a controversial food additive. Tyson Foods took a hit over potential health concerns.
Tyson Foods and PepsiCo are just two of the stocks Team A and Team B are tracking. Buying and selling of both companies was a source of debate.
Why did one student decide that the Tyson stock should be sold?
"I wanted to sell it because, first of all, it's down right now, and I don't see much more potential for it coming back up."
But, on the other hand ...
"Keeping the stock, we could see that it might appreciate in value and there might be an opportunity to sell later down the road," another student explained.
In the end, the students choose to sell Tyson, but they'll have to take that decision to the board before a final decision is made.
So, the question is when do you decide to buy a stock and when to sell?
"I would say Pepsi for buying because it's something that everyone uses, everyone drinks it, and it's a stock that really has potential for growth," said a Pepsi drinker who admitted that had a little bit to do with his reasoning.
"I actually would suggest selling the PepsiCo stock because looking at the trends just over the last two years, whether it's a monthly basis, a weekly basis, a yearly basis, it's pretty steady, and although that's good because it means you're not losing, it also means you're not gaining," another student countered.
PepsiCo and Tyson, there's a reason to buy and a reason to sell. So, who's right?
"Some investors have a longer time horizon and are more in it for the long haul. Therefore, they can wait out some of those market fluctuations, and so it could be right for one to buy and right for another to sell. It just needs to make sense," Jordan Rosenberg explained.
And so far, this investor class is making cents and actually quite a few dollars, as well, but along with all the talk about portfolios and profits, Temple Israel Rabbi Josh Bennett says he hopes the students take away something even more important.
"This really couches itself in values from a religious tradition that then proves to these young people that they can apply their community values to the real world and see real results ... and that is giving back to the community in amazing ways."
They're all winners because they're all learning valuable lessons many adults never learn.
Half of the profits made will be going to charity. Graduating students will also receive a financial gift in the form of a scholarship for higher education.
Those enthusiastic students choose to even meet during their summer break before making a decision about buying and selling some of their investments.
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