What's a Stock? Own a Slice

What your kid learns

• Shares are slices

  Companies sell shares to raise money to grow. Each share is a tiny piece of the company. The stock market is where people buy and sell shares.

• How owners can gain

  Owners gain when the share price rises. Some companies also pay dividends, a share of their profits. Many companies don’t.

• Prices move every day

  Prices go up and down with news, how the company does and how investors feel. Nobody knows tomorrow’s price.

• Risk in three lines

  A company can fail, and its stock can go to zero. Owning many companies, a basket, lowers that risk. Drops are normal, so money you need soon doesn’t belong in stocks.

The story: Kayla owns a slice

Kayla and Alex follow pretend news about a made-up company and watch its price move.

1. Helper: Kayla owns one pretend share of Crunchy Co., a made-up snack company.
2. Kayla: So I own a tiny slice of the company? Like one thin slice of a giant cake?
3. Helper: Exactly. When Crunchy Co. does well, that slice can be worth more.
4. Alex: News: their new flavor is a hit! The pretend price goes up.
5. Helper: But prices move every day. And a company can fail, so its stock can go to zero.
6. Kayla: Then owning a little of lots of companies is safer than owning just one.
7. Helper: A stock is a slice of a company. Money you need soon stays out of stocks.

The game: Pretend portfolio

You own one share each of three made-up companies. Draw news cards and predict what happens. Pretend companies, pretend prices.

Games use pretend money and work with taps or a keyboard. Nothing is timed.

New words

stock / share

a tiny piece of a company

shareholder

someone who owns shares of a company

dividend

a share of profits that some companies pay owners

stock market

where people buy and sell shares

Questions at the end

• What is a share of stock?
• How can a stock owner gain?
• A company fails. What can happen to its stock?
• Why does owning many companies help?
• Why do stock prices move?

Remember this

A stock is a slice of a company.

Talk about it

If you could own a slice of one company, which would you pick? Why?

Try it at home: Who’s behind your stuff?

1. List 5 things you use every week.
2. With a grown-up, find the company behind each one.
3. Just look. No buying.

The whole mission works with no account or app.

School standards

• Grades 6–8
• National Standards for Personal Financial Education: Investing