18-year-old Braden Van Dyke uses capital markets savvy to write award-winning essay, placing first in the nation for the SIFMA Foundation’s Fall 2016 InvestWrite® competition.
Byron Center, MI, March 21, 2017 – While most students focused on homework and extracurricular activities after school, 18-year old Braden Van Dyke, a senior at Byron Center High School, was busy analyzing the global financial markets. His hard work resulted in a long-term return, making him a national winner of the SIFMA Foundation’s InvestWrite® competition. Van Dyke has been named the first-place high school winner for Fall 2016. #HighSchoolDivision The program challenges thousands of students across the country to consider an investing scenario and make recommendations that incorporate short- and long-term investment goals.
“Braden Van Dyke’s rigorous analysis and remarkable essay earned him the SIFMA Foundation’s ‘InvestWrite Genius’ title this semester,” said Melanie Mortimer, President of the SIFMA Foundation.
“We commend Braden and his teacher, Brian De Haan, for this achievement. Helping students better understand our economy, our markets, the role of investors, and how to make good investments will pay dividends for the students, their education, and the economy.”
InvestWrite serves as a culminating activity for 600,000 4th-12th graders nationwide who compete each year in the SIFMA Foundation’s Stock Market Game™, an online simulation of the global capital markets that reinforces STEM learning, 21st Century skills, economics, investing and personal finance. Since InvestWrite’s inception in 2004, over 200,000 students have submitted essays. Van Dyke is among 20,000 students this school year participating in the InvestWrite challenge, which bridges classroom learning in mathematics, social studies, and language arts with the practical research and knowledge required for long-term personal financial planning.
The essay prompt challenged Van Dyke to describe the strategy he used to select his Stock Market Game classroom portfolio and also to analyze and suggest stocks based on the “blended” approach favored by investment guru Peter Lynch. The recommendation needed to include a stock, bond or mutual fund that would make a good long-term investment. The essay required Van Dyke to describe the technical or fundamental analysis he used to make his recommendation. Van Dyke focused on Facebook, including in his essay, “In the end, a blended approach is imperative to smart, successful stock market investments. By taking what you already know and adding metrics of both quantitative and qualitative metrics, you can choose the right long-term investment. However, you must have a stomach for the long run and have the end in mind. Having a diversified portfolio helps ensure that your eggs aren’t all in one basket and reliant on only one stock.”
InvestWrite enables students like Braden Van Dyke to develop the personal financial savvy needed to make practical financial decisions with confidence and gain a deeper understanding of economic opportunities, consequences, and benefits. Students consider real-world events and news, conduct research online, and develop investment recommendations. They work in groups during The Stock Market Game™ program and then write their InvestWrite essays individually to reflect their critical thinking, analysis and creative talents.
Braden Van Dyke is president of his senior class and co-president of the National Honor Society Chapter at Byron Center High School. He has been recognized with Bryon Center High School’s Top Dog Award and has been active all four years in the Student Life and Leadership program at the school. His teacher, Brian De Haan, uses the Stock Market Game in his class where he has taught economics for the past 18 years. De Haan said, “Teaching students the basics of finance and the stock market is essential to the students’ broad education and future success as informed investors in life. Utilizing the Stock Market Game and InvestWrite allows my students the experiences to enhance their understanding of the financial services industry.”
Winning InvestWrite essays are chosen through rigorous judging by thousands of teachers and industry professionals who evaluate students’ understanding of long-term investing, diversification, the capital markets, and factors that drive investments as well as their expression of investment ideas in essay form.
Winning Essay by Braden Van Dyke:
Remember that one toy that you had to have as a child? Whether it was a Rubik’s cube or toy doll, it always looked so perfect, wrapped and untouched in the box on the toy shelf of your local supermarket store. If only you could convince mom or dad that if you had this toy, you’d “keep this one forever.” On a lucky day, you got the toy, but you always broke your promise – and as a much older, more mature teenager you begin to realize the amount of wasted time and money that was put into that one desire and decision. You’re an adult now and you find yourself, yet again faced with a decision – or rather, decisions. Here you are, once again in the market – the stock market. However, here, the stakes are much higher. What do you buy? What’s good? What’s not? After careful research and consideration, you know what to do. With your ear to what’s popular, your eye on the perfect metrics, and your mind sharpened with patience and confidence for the long run, investing in stocks will be seamless and advantageous, reaping rewards of financial gain and knowledge.
In the beginning of my stock market search, I first looked to what I thought would be the right stocks to buy – Netflix, Starbucks, Twitter, Apple Inc, etc. Seldom will you find a person alive who has not heard of any of those modern giants. I, simply, started off with what I knew. What I thought was successful. I took what I thought was a blended approach. I knew these companies were popular and I did a quick search into some of the companies’ numbers. I merely typed in “Twitter stock,” and voilà, there was this beautiful graph powered by Google Finance with prices and numbers. My eye quickly went to the price. Twenty-three dollars. That was good. It was low and I knew enough that you wanted something that was lower so the price, and your profit, would increase. What’s more? The price was green with a positive percentage. I pushed the “news” tab and saw rumors of someone buying Twitter – I thought that rumors of someone buying Twitter propelled the stock up and thought all the better of it. Nearly a thousand shares later; I was a “co-owner” of Twitter. Although I had the right idea of an approach that blended what’s popular with statistical metrics, I was looking at the wrong indicators. Buyout news is bad for the company being bought out. Current price and instantaneous stock direction is useless if not compared to other metrics and, most importantly, against the trend. Soon later, the stock plummeted 30% killing my portfolio.
One such stock that exemplifies a solid long-term investment as described by Peter Lynch’s blended approach, is Facebook.
First is what you know. Facebook has been a social media giant since the beginning of the modern technological revolution. Nearly everyone with Internet access has Facebook. With two billion people with Internet access in developed countries, per International Telecommunication Union, Facebook users make up 1.1 billion holding the top spot in social media according to eBusiness.
Next, research must be conducted to further back the stock. Facebook has multiple quantitative metrics to reinforce it as a solid long-term investment. Not only is it important to be aware of the current price and direction, but also the overall price change and direction throughout time. This can be accomplished through Yahoo Finance using a simple moving average over 50 days and 200 days. In the past six months, year, and two-year span Facebook has seen both growth in the price and an upward overall direction with its 50-day moving average always being above its 200-day moving average.
Moreover, a beta metric can be used to judge the risk/reward level of a stock. Beta, per Investopedia, measures the volatility of the stock compared to the market. Facebook, per Yahoo Finance, has a beta of 0.46, which means that when the stock market rises, Facebook moves only 46 percent with the market, but, likewise, only moves 46 percent lower when the stock market falls. This makes Facebook a safer, less risky stock and a good long-term investment.
Finally, a quarterly and annual measure of the company is an important quantitative metric to consider. Facebook’s quarterly revenue has been rising, along with its profit, by over $1 million in the past year and $10 million in the past two years. Facebook’s assets have been rising that much more – nearly doubling in the past two years. Per Morningstar, Facebook’s three-year revenue growth and three-year net income growth are leaps and bounds above average.
Finally, qualitative research is necessary to strengthen Facebook as a strong stock choice. Understanding that all news is not good news, top news sources, such as Seeing Alpha and Motley Fool, are good places to find the right kind of information regarding companies and stocks. These sources have continually reported on Facebook news and updates, such as Facebook’s addition of Facebook Live and added reactions.
In the end, a blended approach is imperative to smart, successful stock market investments. By taking what you already know and adding metrics of both quantitative and qualitative metrics, you can choose the right long-term investment. However, you must have a stomach for the long run and have the end in mind. Having a diversified portfolio helps ensure that your eggs aren’t all in one basket and reliant on only one stock. Moreover, having a clear exit strategy is important so that you don’t pick and choose stocks emotionally. Remember, this is an investment, not a short-term whim. A blended approach offers a sound method of selecting stocks by blending what you know with the right quantitative and qualitative metrics with patience and confidence for the long run, making for investments that are seamless to select and advantageous, financially and knowledgeably.
About the SIFMA Foundation for Investor Education
The SIFMA Foundation is dedicated to fostering knowledge and understanding of the financial markets for individuals of all backgrounds, with a focus on youth. Drawing on the support and expertise of the financial industry, the SIFMA Foundation provides financial education programs and tools that strengthen economic opportunities across communities and increase individuals’ access to the benefits of the global marketplace. Notable Foundation programs include the Stock Market Game, which has served 16 million students since it began in 1977, the InvestWrite national essay competition, www.investwrite.org, the Capitol Hill Challenge, and Invest It Forward. For more information on the work of the SIFMA Foundation, visit www.sifma.org/foundation.
About SIFMA
SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit www.sifma.org.