InvestWrite Winners Spring 2017
The winners each received certificates and $50.
Why is Diversity Important?
by Jeffrey L.
Forest Park Elementary School, Little Rock School District, Pulaski County
Advisor: Jason Finney
What is diversity? Diversity is necessary in the stock market and in normal daily life. If all you ate were potatoes and were addicted to them, but then all the potatoes got infected by a bug and you could not eat them anymore, what would you eat? This is just one silly example of why diversity is so important in life—and the stock market. If you bought stocks in just the oil industry and then the main place where oil is drilled decides they want to stop trading and having connections with one another, then all the oil and gas stocks would probably go down. If everyone were the same and didn’t have different opinions and did everything the same, wouldn’t the world be boring? If no one had different interests and had the same opinions about things, what would be the purpose of making those things and doing anything, what would even be the purpose of living?
My group in the Stock Market Game had a pretty diverse portfolio. We have 9% of our shares in basic materials, 14% in consumer goods, 17% in financial aid or insurance, 9% in healthcare, 20% in technology, and we had a bit of cash left. Our group is evidence that having a diverse portfolio is extremely important, because we have reached third place out of 266 groups in our region, and the Stock Market Game is still going. We’re still buying and diversifying our portfolio, so we may climb even more!
If I were to do anything differently with my portfolio in real life I would probably find and invest more in new stocks that are in sectors I don’t have any stocks in. I think I would buy mutual funds and bonds because they are the safest way to earn more money, and it is very rare to lose money with them (bonds actually reduce risk). I also would buy mutual funds since when you buy mutual funds you're buying them with other investors, so you get part of a pool of their investments. You get built-in diversification.
So why is it important to have a diversified portfolio? First, if all you invested in was in the same two or three sectors and something happened that made one of your stocks go down then the other stocks in that same sector or industry would probably go down too, as I have already stated. Diversity also helps reduce risks. If your portfolio was diversified and one stock went down from some kind of event and you did not have almost all of your other stocks in the same industry or sector, then at least they would not be affected from that specific event.
Diversification plays a very critical role in the stock market and in the world that is around us. I have learned a great deal of knowledge about why diversification is so significant in the stock market and why it helps to have it in your portfolio. I have also learned so much about the stock market in general and how to pick stocks, mutual funds and bonds, and when to sell. If I play the Stock Market Game again I will buy some mutual funds and some bonds. I will also try and find stocks that are in industries or sectors that I don’t have any stocks in. Diversity is important!
Serving Those Who Serve Us
by Logan F.
Cabot High School, Cabot School District, Lonoke County
Advisor: Stephanie Wade
Values based investing is the act of investing to make the world a better place. This is done daily by thousands of investors. Say if an investor was greatly outraged by the affects that cancer or other diseases had on people, they may invest in different medical companies. This is done with the intention to provide for those companies to assist in their attempts to battle the diseases. It is not just disease that investors battle though. They also work to help those who are victims of things such as natural disasters or even physical abuse by investing in related companies. One world issue that deserves to be invested in is that of military service members who deal with PTSD and the difficulty of transitioning to civilian life. This is a real issue that deserves more attention than it has, and that could be helped with values-based investing.
Every single year, at least 180,000 people enlist in the United States armed forces. They devote a great portion of their lives to serving and protecting this country. Every year, at least 550 people leave the service and search for a new life as a civilian. This comes with great difficulty. When people join the military, they rarely learn techniques and skills that are often used in the civilian world. This means that it is a huge challenge for most veterans to find a successful job to provide for them and their families. Through this stress and the possible stress gained in the service, many veterans grow depressed and hopeless. Some even turn to suicide. Roughly 22 veterans commit suicide a day due to their stresses, and this number is obviously disgusting. One veteran lost to suicide is one too many. Therefore, someone must take a stand in serving those who serve us. Several companies are aware of this fact, and they do what they can to help, but many do not have the money or resources to do as much as they would like to help the veterans. For this reason, it would a great idea to bring investors into this act, so we can provide more money and opportunity to save those who fight for us.
Disney has respected the military for many years, and has donated millions of dollars to military programs in attempts to aid the veterans. Sprint has accepted over 1300 veterans as employees over the recent years. One business that really seems to stand out, however, is Bank of America, who has pledged to provide jobs for 10,000 veterans. In the Stock Market Game that I have been involved in recently, I plan on investing in these companies due to their supportive acts towards others. I believe that Disney and Bank of America will be two of the most successful long-term investments. Disney would be because they play an important role in creating and reinforcing inclusive behaviors for veterans and other employees in the workplace. They also help support professional development courses designed to help veterans navigate their careers at Disney. On top of that, Disney is well known for bringing peace and excitement to people of all ages, so it can help those with PTSD. Bank of America would be a great investment to help our veterans due to that huge goal they have planned to achieve with 10,000 veterans.
Investing in companies such as Bank of America and Disney will allow us to be so much closer to saving every veteran’s life after the military. When we buy stocks of a company, we gain ownership of a part of that company. The money we pay to buy the stocks goes directly to the company to assist them in anything they may need it or want it for. This means that if more people were to invest in these companies like Bank of America and Disney, they would have more available money to put towards giving back to veterans. In doing this, there really is no set investment strategy. It is all about the concept of values based investing, in which we invest not to benefit ourselves necessarily, but to provide more money to programs that give aid to others. If we invest in companies like Bank of America and Disney, they will can turn that money around and put it to use in saving the veterans. Disney could provide more money to military programs and Bank of America would have a much easier time providing 10,000 jobs, maybe even more, to veterans.
It is completely saddening that so many of the world’s finest men and women have such a difficult time living after leaving the service. No veteran should ever fall depressed and possibly even commit suicide because of the difficulty of transitioning to the civilian world. Therefore, investing and putting money forward to aid in their recovery and transition is so important. Investing is the path to take in helping. I hope that after reading my thoughts and opinions, you all will search within yourselves to see how you have been served by our military, and feel encouraged to paying it back. It is our turn to serve those who served us.