Catch Them Financial Life Lessons of the Capital Market
Life is full of winning, losing, and taking risks. At the very root of these concepts often time begins with money. Our country is
controlled by money, as a matter of fact, the entire world is run by the essence of commerce. The board game Monopoly can be very
similar to how people in the real world invest, make trade-offs, and take risks. The more money someone has allows them to take
bigger risks and invest more. In order to make the most gains, it is almost impossible not to take some sort of risk. Although the game
of Monopoly is fun, losing out in the real world is definitely not. When making investments, it would be best to keep a few good plans
in mind.
Nothing in life is ever guaranteed. A quick way to make a lot of money can be by taking a risk. In Monopoly, putting a hotel on a
property is one of the quickest ways to get a bunch of cash. However, the player is taking that risk of no one landing on his property. If
he dumps his money into that hotel and no one lands on his property, he would not be able to pay money to other players, forcing him
to file bankruptcy or sell. In life, spending thousands on a stock that is supposed to do well, is not the smartest move. To stay on the
middle ground of risky and safe, an investor should start off small. Buying a smaller portion of stocks then seeing how their pattern
fluctuates could be a smarter choice than taking a huge risk at their money. Understanding that in the stock market nothing is
guaranteed is a significant financial life lesson.
After understanding the risks of the stock market, it would be wise of an investor to have a sound knowledge of how the stock market
works. Having extensive background knowledge of what stock their money is going into is pretty crucial. Being familiar with the
patterns of the stock can help when choosing where to invest. Just as Monopoly, it would be beneficial if player knew which properties
were most commonly landed on. If an investor is strategic in how the money is spent, then be a major helping factor in his or her
success.
While having a good plan is important, knowing when to let something go is too. If a stock is continuously lowering and only raises a
few times, it is best to cut it out while it is only minor loss. Even if it does not cost much or there are not as many purchased; if it is
showing poor patterns then it means time to sell it. Like in Monopoly, if a property is not giving much money and another player wants
it would be smart to make a reasonably trade off. Some people make the mistake of keeping those kinds of stocks because they think it
gives them a little bit of extra money from time to time. However, those stocks could potentially cause an investor to lose thousands in
the long run.
My class participated in the online Stock Market Game. Each group had four members and our class was competing against each other
to see who could make the most money. At one point my group was generating the most profit out of the entire class. Luck was only a
minor factor; we did research on a variety of companies, sold stocks that were not doing well, and we also knew that popular stocks
would not guarantee a high profit. We took risks by purchasing a large amount of some companies; however, it was only after we saw
that they did well in the previous year. Whenever we were uncertain about a company, we would only invest a small amount and
purchase or sell more if necessary.
Monopoly is similar to the stock market; although, in Monopoly there is a large amount of luck involved. If the game remained the
same and just took out the luck of landing on the best properties, it would involve more strategic planning. Maybe it could be changed
by if a player lands on a property, it then becomes available for auction and everyone can bid on it. By creating the auction, all of the
players have a chance at the higher profit properties. In doing so, this could make Monopoly even more similar to how the stock
market works.
Just like anything in life, a basic knowledge of the stock market is essential when making investments. Taking risks can be rewarding;
although investors need to be smart about it. Like in Monopoly, a player needs to be thinking ahead when purchasing properties and
think about which will be most beneficial. Simply doing the research by not hoarding the lowering stocks certainly helped me in my
experience.
Kassi Barndollar
Spring 2016
High School Division
1st Place in State - InvestWrite Winner