Youngsters with great ideas about how the Internet has affected saving and investing can win big prizes in this year's Stein Roe & Farnham essay contest.
The fifth annual competition is open to fifth, sixth and seventh graders. Nine winners will share $25,500 worth of shares in the Stein Roe Young Investor Fund or the Liberty Young Investor Fund. More than 6,000 youngsters have competed in previous contests sponsored by the Chicago company, which offers several mutual funds aimed at kids.
This year's question: "How do you think the Internet has changed the way people save and invest?"
It's an appropriate theme, with more and more students participating in school-supervised simulated online stock trading contests. And more kids have gotten caught up in the very real world of volatile dot-com stocks. That includes a New Jersey teen-ager who recently was charged by the Securities and Exchange Commission in a "pump and dump" operation. The youth allegedly bought shares of companies, touted the stocks in e-mail messages and then sold the shares for a big profit.
Of course, that's not the way most kids invest. Most learn to buy for the long term and to pick companies they are familiar with. As proof, take last year's Stein Roe contest, in which students were asked to recommend stocks for the Young Investor funds.
Here are excerpts from the three first-place essays:
_Fifth grader Bethany Murphy of Mount Laurel, N.J., picked Home Depot: "I hated the trips to Home Depot with my parents. They bought so much and spent hours in that store. But the aisles are fully stocked, the checkout lines packed and the parking lot filled with cars."
_Sixth grader Catherine Hobson of Mesa, Ariz., recommended VoiceStream Wireless, a communications company: "On my ... softball team, it is common to hear cell phones ringing (parents checking on pickup time). We are entering a unique period in the history of mobile communications."
_Seventh grader Bryan Mayadas of Bellaire, Texas, liked McDonald's Corp., partly because of its "highly recognizable name around the world" and its contributions to charitable causes, such as the Ronald McDonald House.
Many adults could learn from these kids.
To request an entry form for this year's Stein Roe contest, call (800) 403-5437 or go to www.steinroe.com. Winners will be announced after March 31, 2001.
Essays should be no more than about 250 words. They will be judged on content, writing style and writing mechanics. The application deadline is Dec. 31. Students need not be Stein Roe shareholders to enter.
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True or false
1. A certificate of deposit must be held for a set amount of time, such as six months or a year.
2. A share of stock represents ownership in a company.
3. Treasury bonds are a safer investment than real estate.
4. A mutual fund is an investment issued by a state or local government agency.
5. "Compound interest" refers to money earned from a tax-exempt investment.
Answers: 1. True. 2. True. 3. True. 4. False. 5. False.
Source: www.edgate.com
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(c) 2000, The Kansas City Star.
Visit The Star Web edition on the World Wide Web at http://www.kcstar.com/
Distributed by Knight Ridder/Tribune Information Services.
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