Stock Market Games to Teach Kids About Investing: More Harm Than Good?

The topic of using The Stock Market Game in classrooms to teach teens about investing has had my ire for quite some time. I’ll admit that years ago I was in the mindset of thinking, “Well, ANYTHING that gets a kid excited about learning to invest is a good thing.”

…No, it’s not.

The article, What Teenagers Really Learn from Stock-Market Games, from The Wall Street Journal brought this front of mind. Allow me to make a few salient points, with excerpts from the article, that back my philosophy on the topic of kids and investing.

Teenager disappointed at computer desk playing investing game.

Real-Life Stock Strategies Embrace Diversification and Avoid Risk

The ultimate goal that parents have (or should have) when teaching kids about investing is instilling solid pillars for their future habits. Two essential pillars:

1. Diversification to manage ups and downs

2. Take a long-term approach

Unfortunately, many of these games do not support these pillars. Instead, kids learn that high-risk single-stock purchases net higher rewards.

Successful investors diversify broadly, avoid unnecessary risk, and rarely trade. So why are kids getting rewarded for doing the opposite?”


Having worked with many families’ financial plans over the years, most quickly realize that they don’t have the expertise, time, or energy to attend to the daily oversight needed for each individual stock holding they have. Therefore, they don’t buy individual stocks. Instead they choose diversified vehicles such as ETF’s, mutual funds, or managed accounts.

To put it simply, people that aren’t professional money managers are better served with broadly diversified portfolios and avoiding the unnecessary risk that the single-stock purchases are inspiring in these sort of stock market games.

Investing Is Not A Game

Investments are serious endeavors, and turning them into a game that rewards extreme risks sends the wrong message.

We could make drivers’ education exciting, too, by teaching kids to run red lights and crash into brick walls. I suppose you could even argue that might make the survivors better drivers.”


Unfortunately, the “winners” of these stock market games often get lucky, and the tactics/outcomes set unrealistic expectations for when they start investing real money later in life. By ending the game when the student “wins” or reaches a certain dollar amount, they lose out on experience with long-term market fluctuations and instilling in them the false belief that repeating the same risks will net the same results.

As the article went on to say, “Anybody who can turn $100,000 into $200,000 in 10 weeks with what they learned in their high school class is just lucky. The next 10 weeks, they probably won’t be so lucky. That will be the lesson, that the more you do it, the more likely you’re going to lose.”

Encouraging students to take extreme risks to try and “win” a game makes zero sense. It’s inspiring bad habits.

While one can make a fair point that these stock market simulation games are a way to get kids interested in investing, they also come with a risk. Games that emphasize “high-risk/high-reward” attitudes and impractical investment strategies rather than instilling sustainable practices and philosophies will not serve students later on in life. In my opinion, these types of simulations do more harm than good, and we can find a better way to put children on a better path to future financial success.

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