Two weeks ago my daughter asked me for some help on a school math assignment. She was given an imaginary $100,000 to invest in ten stocks and track how they performed over the course of two weeks.

In selecting her stocks, she picked things she believed in or liked. She likes to listen to music, so she chose Spotify. She loves to read, so she chose Scholastic. Baking meant General Mills. Her sports interest translated to Nike, and so on.  In some ways it was a reflection of Warren Buffet’s strategy of investing in things you understand.

It’s worth noting that understanding how the stock market worked was something my master’s students at City College clamored for this semester. They noted that throughout all of their eighteen years of education they had never received any instruction in financial literacy of any kind.

Not surprising that one student’s senior project was designing what he called “life math” curriculum for underserved communities.

It is hard to imagine any amount of instruction could help someone fully comprehend the stock market these days. 

During the coronavirus and the corresponding economic shutdown, the market tanked – which was understandable. However, after the initial drop the fundamentals of the economy changed little. It was getting worse for people each day and a long recovery was forecast. Yet the market climbed and climbed.  

And then last Thursday, the market presumably was somehow surprised and scared by the very predictable rise in COVID19 cases brought on by the reopening of economies across the country. The Dow dropped 2,000 points. Only to recover a quarter of the losses the next day.

From news reports and discussions with others, I learned that part of the reason for the market’s general trend upward and resilience was simply that “there was no where else to put the money” 

Read that again, “no where else to put the money.”

What we chose to invest in and why says a lot about who we are as a country. So if we invest our money only in companies for the sole purpose of our individual financial gain – well that says one thing.  

If we invest in communities, families, people that says another.  

Consider the following options:

You could continue to invest in the market but do so by investing more in socially responsible companies and funds.

You could explore social impact bonds which are essentially an investment in social service innovation.

You could invest in your own local businesses, where every dollar spent returns 2 to 4 times the economic benefit as measured in income, wealth, jobs, and tax revenue than when you purchase from a global company.

You could invest in non-profit organizations that invest in families and communities.  Check out the track record of the Family Independence Initiative.

And finally, you could invest in the life of someone looking for an opportunity to move up.  Here is a list of organizations that can connect you to someone who will change your life while you try to help change theirs. Yonkers Partners in Education is a personal favorite of mine.

Understanding the market is a fool’s errand. Understanding how investments of our time and money can make a difference in the lives of others – a much simpler and more important concept. One more worthy of being taught in school.

After two weeks, my daughter’s investments yielded a return of .4% closely matching the Dow’s performance over the same period. I wonder what more she could have learned if given the opportunity to invest beyond companies but in communities, families and people.

Nowhere else to put the money?  Look again.

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