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Minnesota Student Out-writes the Nation, Wins High School Division of SIFMA Foundation's InvestWrite Competition
[May 20, 2011]

Minnesota Student Out-writes the Nation, Wins High School Division of SIFMA Foundation's InvestWrite Competition


(Targeted News Service Via Acquire Media NewsEdge) MINNEAPOLIS , May 19 -- The Securities Industry and Financial Markets Association issued the following news release: It's official! Jack Alexander, a senior at Wayzata High School, Plymouth, Minnesota, is the national first place winner of the SIFMA Foundation's InvestWrite(R) student essay competition, sponsored by the SIFMA Foundation and SIFMA member firms. Alexander claims top prize for the high school division of the Spring 2011 national competition.



As a culminating activity for the country's 600,000 annual Stock Market Game(TM) participants, Investwrite(R) challenges 4th-12th graders to analyze an investment scenario, think critically and provide a long-term financial plan. Students address real-world economic factors and trends, better preparing for their own financial futures. Jack Alexander is one of 20,000 students who take the InvestWrite challenge each year across the nation.

In his essay, Alexander was asked to discuss how he would invest $100,000 before leaving on a space mission that would equate to being gone for 40 years. He was also asked to discuss how his strategy would change if his investment timeframe was only five years. "If I was investing for the short term, say five years or less, my portfolio would probably include low risk mutual funds and bonds. But with $100,000 and a 40-year space vacation, I can afford to be more risky. Through research and careful planning, I have found what I believe to be the best combination of mutual funds and exchange traded funds (ETF's) to ensure maximum growth with minimal risk." He explained the importance of lithium ion power storage to the future of the global economy. Alexander added, "I concluded that the best way to invest in this amazing metal was to purchase $35,000 worth of the Global X Lithium ETF (LIT). It creates an index of 20 companies in the lithium business in 7 different countries, has an expense ratio of just .75%, and a 52-week return of 34.68%. Putting 35% of my money into a single metal is highly risky, but I am confident that 40 years down the road lithium will be one of the most demanded materials on the planet." The Spring 2011 winning InvestWrite essay composed by Alexander was chosen through rigorous judging by thousands of teachers and industry professionals who evaluate students' analysis of asset allocation, the investment potential of various publicly traded stocks, their overall understanding of the stock market, and the manner in which they express their investment ideas in essay form.


"Teachers tell us that InvestWrite is not only an exciting contest with great prizes, but also an effective tool for students like Jack to learn about personal finance and long-term saving," said Melanie Mortimer, Executive Director of the SIFMA Foundation. "What's more, InvestWrite helps students perfect their research, writing, and analytical skills, while learning important life lessons that will make their futures brighter." The SIFMA Foundation's InvestWrite competition bridges classroom learning in mathematics, social studies, language arts, business and economics, with the practical research and knowledge required for long-term personal financial planning. Students are, in fact, building on what they have learned through their participation in The Stock Market Game, which has reached more than 12 million students since its inception in 1977.

An independent study by Learning Point Associates found that students who participated in the Stock Market Game scored significantly higher on mathematics and financial literacy tests than their peers who did not participate. They also found that teachers who taught SMG reported the program motivated them to better plan for their future and to engage in financial planning, research, and use of investment products and services. The Stock Market Game has been named the only program that successfully increased scores on the Jumpstart Coalition's test of high school students' financial literacy.

Jack's teacher, Candace Lee has taught business classes for 17 years and was named the Minnesota Secondary Business Teacher of the Year in 2009. She has served on the Board of the Minnesota Jumpstart Coalition since 2005 and rang the opening bell at the New York Stock Exchange in August 2001. Alexander has competed in gymnastics, cross country, wrestling and track at Wayzata High School and he likes to read and research new technology. Both Lee and Alexander will be recognized and presented with prizes and awards at an event sponsored by Best Prep on Thursday, May 19 at the TCF Bank Stadium in Minneapolis.

Text of Jack Alexander's Winning Essay: The 40 Year Return Every investment carries varying degrees of risk and uncertainty, but most investments will increase in value given enough time. If I was investing for the short term, say, five years or less, my portfolio would probably include low risk mutual funds and bonds. But with $100,000 and a 40-year space vacation, I can afford to be more risky. Through research and careful planning, I have found what I believe to be the best combination of mutual funds and exchange traded funds (ETF's) to ensure maximum growth with minimal risk.

Mutual funds are great investments for the long term. They are professionally managed, diversified, and if you pick the right one, the expenses are minimal. Lifecycle funds, or targeted maturity funds¬, are good for investors who don't have time to constantly monitor the market. The investments will be more risky and aggressive at first, and as the maturity date nears, they will become more conservative to preserve wealth. The Lifecycle fund I chose was the T. Rowe Price Retirement 2055 fund (TRRNX), which has a 1 year return of 16.1 %. The fund has no load, and an expense ratio of only .77 %, both very important factors when investing long term as it can have a huge effect on profit. It is highly diversified, with top holdings in the healthcare, financial services, industrial materials, consumer services, and energy sectors. I plan to invest $40,000 in this fund in order to build a solid and diversified foundation in my portfolio.

As our society becomes more technologically advanced, there is one product in particular that will see an enormous surge in demand- batteries; and the rare earth metal that powers them. Lithium has the capacity to store electricity more efficiently than any other material, making lithium ion batteries the most effective means of power storage. Many new cutting edge energy technologies such as solar and wind energy will depend heavily on Lithium ion power storage. Lithium ion batteries already power most of the devices on the market today; over 90 % of laptops and 60% of cell phones use this fascinating technology. I concluded that the best way to invest in this amazing metal was to purchase $35,000 worth of the Global X Lithium ETF (LIT). It creates an index of 20 companies in the lithium business in 7 different countries, has an expense ratio of just .75%, and a 52-week return of 34.68%. Putting 35% of my money into a single metal is highly risky, but I am confident that 40 years down the road lithium will be one of the most demanded materials on the planet.

Palladium is one of six metals classified under the Platinum group metals (PGM's), a collection of elements with special chemical properties that allow for a diversity of industrial and commercial uses. The metal is found in almost every consumer electronics device, from LCD TV's and computers to cell phones. However, the majority of palladium is used to manufacture catalytic converters, a key component in automobiles. China and India each have over 1 billion people living within their borders, and combined they populate over 35% of the entire world's population. As their economies continue to grow, the demand for transportation, specifically cars, will skyrocket. As a result, palladium will be needed more than ever to supply these emerging markets with catalytic converters for every single exhaust system. I decided to invest my remaining 25,000 dollars in an ETF that holds physical palladium (PALL). With an expense ratio of .6% and a 52 week return of 67.3%, it is a solid investment.

Nobody can predict what the future will hold; we can only make an educated guess based on the information we have today. Through my research I came to the conclusion that in 40 years Palladium and Lithium will be two of the most highly demanded metals in the world, which translates into enormous profits. The T. Rowe Price 2055 Retirement fund will diversify my portfolio and balance the relatively high risk of investing in Lithium and Palladium. I am convinced that these investments will give me the highest possible return when I come home from my 40 year space vacation.

TNS mv45 110520-3397521 (c) 2011 Targeted News Service

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