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Teaching Our
Kids About Money
Rich parents will more likely have rich kids.
Education from our kids always starts from home. They
learn from our way of living, how we are doing in
everyday life. They are very observant to adults,
grasping little by little , day by day . One day , I
saw my 3 years old kid facing the mirror holding a
disposable razor with plastic handle trying to shave
his mustache. He was very curious, no doubt in my mind
he saw me doing the shaving of my mustache. When I
bought a pocket organizer and phone book, he has to
have one too. The learning never stops and there is so
much to learn. We need to encourage our kids to read
more books as many as they can. My eight years old and
ten years old kids already knows how to valuate stocks
if it is cheaper or expensive to buy based on P/E
ratio. They even learned technical analysis using the
50 days moving average and 200 days moving average.
The can even tell if the stocks are overbought or
oversold using the slow and fast stochastic. As eight
and ten years old kid, they learned so much and
enjoyed it thru our interfamily tournament every
month. The first month we started buying stocks based
on the stocks they know and heard about. The both
memorized already all the 30 DOW Jones components and
20- 50 NASDAQ stocks. The next few months of our
tournament. We are buying stocks screened with their
fundamentals. As the economy keeps on deteriorating,
We decided to stay on the old defensive stocks which
both of them are gaining every end of the month. The
incorporate one very volatile stocks like RFMD, FLEX
and even CMGI. My younger once are very aggressive.
Since, he been watching CMGI that it keeps on falling
hard and he had an idea that this stocks will jump so
high. He decided to buy this stocks after 7 days of
falling. I advice him not to buy the stocks because it
is very dangerous stocks, in real money you will lose
a lot. He just replied, I know Pa. So he did what he
want, The next day CMGI jumped 38%, and he was so
happy because he was ahead of the game. Now I did
advice him this a is already a big jumped, most of the
stocks will pullback. You might consider selling the
stocks.. Well, I still want to hold just for one day
and I am going to sell if it jumped one more, he
replied. The next day, CMGI rose another 39% and then
he sold it. The third day after he bought the CMGI, it
fell 17% AND then another 8% day by day. He was
laughing he did gain 77% in two days. He sold his CMGI
and bought MCD and gain l;ittle by little. Then he
tried another speculation MFNX a $3 stocks which I
already told him that is not reliable stocks. He lost
5% in one day and decided to protect his losses by
selling in one day and bought WMT as part of his
defensive stocks. On the seventh month of our
tournament, We are choosing stocks based on
fundamental analysis, technical analysis heavily
weighed on defensive sector like BA (Boeing) ,
Citigroup, and THC in the healthcare sector for the
reason that I Explained to them the economy is still
slowing down and there is know visibility seen yet. My
two kids did finished reading two stock market books
at the age of 8 and 10.
By webspawner.com
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