Plymouth Teen Wins Nat’l Investment Essay Contest

Recent Wayzata High School graduate Jack Alexander won a trip to the financial capital of the United States, New York City, for his winning essay about how he'd invest $100,000.

Most Minnesota executives probably wouldn't expect to hear sound financial advice from an 18-year-old.

They clearly haven't met Jack Alexander.

The Plymouth resident and recent Wayzata High School graduate won first place in the Securities Industry and Financial Markets Association (SIFMA) Foundation's annual InvestWrite student essay competition.

Alexander-who will leave for Iowa State University in the fall-and fellow competitors wrote about how they would invest $100,000 before leaving on a 40-year space mission. He and two other winners beat out 20,000 other students, and their reward was a trip earlier this month to the New York Stock Exchange floor and a reception with NYSE Euronext employees, who helped judge the competition. The students' business teachers also got to attend.

“If I was investing for the short term, say five years or less, my portfolio would probably include low-risk mutual funds and bonds,” Alexander wrote in his essay. “But with $100,000 and a 40-year space vacation, I can afford to be more risky.”

He indicated that he would place 60 percent of his money in stock exchange-traded investment funds focused on rare earth metals palladium and lithium-and he'd balance out those higher-risk investments by putting the remaining 40 percent in a retirement lifecycle fund; such funds invest in a mixture of both stocks and bonds and go from riskier to more conservative as the maturity date draws nearer.

Alexander estimates that as our society becomes more technologically advanced, batteries-and lithium, which powers them-will see significant growth in demand, particularly because solar and wind energy rely heavily on lithium ion power storage. Palladium, he contends, will also surge in demand as China and India continue to grow their economies. The majority of palladium is used to manufacture catalytic converters, a key component in automobiles, and transportation needs will increase as those highly populous countries continue to emerge, Alexander wrote.

According to the Star Tribune, Alexander has been interested in the stock market ever since his dad opened a brokerage account with him when he was 11. He told the Minneapolis newspaper that he owns the lithium and palladium funds that he wrote about, and they are part of his own portfolio, which has grown from $500 that his dad invested seven years ago to about $13,000 today. He reportedly checks his portfolio every day and makes trades on his cell phone.

The InvestWrite competition is a culminating activity for 600,000 students who participate in a SIFMA Foundation-run stock market game each year. The writing competition challenges fourth- through 12th-graders to construct a long-term investment scenario that would address real-world economic factors and trends.

InvestWrite judges evaluated student essays based on analysis of asset allocation, investment potential of various publicly traded stocks, overall understanding of the stock market, and the construction of the essay.

The SIFMA Foundation provides financial education programs and tools and sponsors various programs for students.

To view Alexander's entire winning essay, click here-and scroll down past the press release.