Note: Familiarity with Ti 83 calculators is essential so that the program INVEST can be entered into a set of these calculators.
The Investment Strategy Game is designed to introduce students to the compounding effect of variable investments over a period of 10 years. The four categories used in this game are: 1) large value funds which invest primarily in the common stocks of large undervalued companies, 2) small growth funds which invest primarily in the common stocks of small companies that sustain above-average earnings over time, 3) the Dow Jones Industrial average of 30 industrial stocks, and 4) 6-month Treasury Bills which offer minimal risk compared to stocks in a fluctuating market. The data used in this investment simulation represents 28 consecutive years of actual average values for each category.
Since our school’s math department has classroom sets of Ti-83 graphing calculators that are programmable, I wrote a program INVEST that enables students to apply different strategies for ten years of investments. Initially, students are given a fictional amount of $2000 to invest in four distinct categories. At the end of the first simulated year, the amount of money accumulated in each category is displayed on the calculator. Another $2000 is given to each student at the start of the second year, which is to be invested in the four categories along with the money already accumulated. This process is repeated for ten consecutive years, each time displaying the investment totals in each category. At the conclusion of this simulation, the final investment total is displayed.
Since the program randomly starts at one of 18 consecutive years, student investment totals will significantly vary from others in the classroom. Additionally, students have the option of performing additional simulations to see if varying strategies of allocating investments alter their final investment total.
My students really enjoy this hands-on activity that can easily be completed within a class period, and provides enough personal data for extended classroom discussions.