STOCK JOCKS.

Thanks to the Web, a new generation of teen investors is playing the stock market

the first stock 17-year-old Chris Stallman ever bought was Walgreens. It was an easy choice. His father is a pharmacist for the company. But that was two years ago, and ever since, Chris has been busy playing the market. He has turned his $2,400 college account into $8,000. He has helped launch a Web site, TeenAnalyst.com.

But perhaps the best benefit for the Bradley, Illinois, teen has been social. "Some girls in the high school have asked me to marry them," he says. "They think I'm going to be rich."

The marriage proposals may be unusual, but otherwise, what is most remarkable about Chris's story is how unremarkable it is. Over the last five years, the Internet has produced a new type of stock speculator: teenagers. The rise appears to continue unabated despite the slowing economy. It has become as enmeshed in the high school experience as football practice and yearbook meetings.

"It's not just the nerdy kids asking questions anymore," says Mitchell Slater, a vice president at Merrill Lynch brokerage company who lectures at schools. "The jocks, the cheerleaders, the druggies--they all want to talk about the market."

Some 12 percent of adolescents 12 to 17 now own stocks, versus 7 percent two years ago, according to a Merrill Lynch survey. That's more than 3 million youths nationwide. While the majority have accounts in the low thousands of dollars, a precocious and generally affluent few have portfolios in the six-figure range.

The phenomenon worries some experts. The wild swings in the market can be particularly troublesome for teens, raising concerns about gambling and dealing with self-esteem that rises and falls with the Dow. But many observers of teen investing say the vast majority follow a fairly conservative strategy, obeying the traditional rules of buying and holding and of investing in what you know.

Alexander Danielides, 14, is neither the fiercest nor the most lackadaisical investor at his high school, the Bronx High School of Science in New York City. When he was 9, he read the 1994 bestseller The Warren Buffett Way, and was fascinated. Applying some techniques immortalized by Buffett, the billionaire investing legend, he tripled his stake in Motorola, is now big on General Electric, and keeps a wary eye on Compaq Computer and AOL Time Warner.

A sophomore, Alexander says that he spends an hour a night researching stocks on the Internet, but he avoids the hallway banter about Federal Reserve moves and insider selling that commands the attention of the 20-plus members of the school's stock market club.

"I'm not one of those kids who gets amazed when a new earnings report comes out," he says.

ONLINE ON THE MONEY

The fact that teens can be taken seriously as investors comes as a direct dividend of the Internet, which allows young traders the most precious commodity of all: anonymity. They can uncover all kinds of data and post questions in chat rooms to receive serious answers. They can trade stocks without having to call a broker and worry that their voice might crack.

"You couldn't get an investment adviser to talk to a kid six years ago," says Ginger Thompson, founder of Doughnet, a Web site on teen finances. Teens "don't need one now."

They still need their parents' help, however. Parental controls exist on brokerage accounts at least theoretically. It is technically illegal for minors to trade securities; that's why teens must open custodial accounts, which are set up in the minor's name but require parental approval for any transaction. But as with the keys to the family car, the online passwords are usually difficult to reclaim once they're turned over.

In many cases, the adults don't seem to want them back. Alexandre Weis of Fort Lauderdale, Florida, invested a $2,500 windfall from his bar mitzvah. His dad saw him picking up the fundamentals and let Alexandre have full control of the account at 14. Within three years, Alexandre had turned his initial investment into $5,000, and he brags that his portfolio has outpaced his dad's.

STICKING WITH STOCKS

Alexandre acknowledges that the recent bear market has shaken him up a little, with his account dropping by 25 percent since last spring. Still, he's bought more shares in the past year. He believes in the commonly held view that the stock market is the premier investing vehicle for teens, who, in planning for the next 60 years, can afford to ride out the ups and downs.

In many ways, teens are more prepared for the stock market than adults. Chris Stallman says teachers and administrators at his school have been asking him for help. "I don't want to give a stock pick to the principal," he says. "Then it goes down, and I'll be in detention."

Stock Jocks

FOCUS: More Than 3 Million Young People Own Stocks

TEACHING OBJECTIVES

To help students understand how and why a growing number of teenagers have become stock market investors.

Discussion Questions:

* Would you consider investing in the stock market?

* Experts say one rule of investing is to buy stocks in companies whose products you know and like. What products do you and/or your friends know and like so much that you would feel comfortable investing in the companies that make them? Does the fact that a product is good necessarily mean its manufacturer will thrive?

* How reliable is "playing the market" as a way of amassing wealth?

CLASSROOM STRATEGIES

Discussion: Note the concern about young investors' self-esteem. How would students feel if they bought $500 worth of a candy-company stock and saw a quarter of its value melt after six months? Would they lose faith in themselves? Or would they honor the traditional rule of buying and holding? Do they understand that investors can lose money in the market?

Cooperative Learning/Research: You can help students understand market fluctuations by having them compile a graph tracking the Dow Jones Industrial Average over a one- or two-week period. Students can listen to daily news reports, noting how much the Dow rose or fell each day. They can then use the data to design a line graph plotting the Dow's performance.

Individual students, teams, or the entire class can simulate stock market investments by "buying" a given amount of stock in any company they like. Check the price of the stock on the Web or in a local newspaper's business section. (See "How to Read a Stock Table," page 15). At desired intervals, students can vote on whether to sell or hold the stock. The Internet is a good place to look for news about companies. Simulated stock investments may continue for as long as you or the students like. Note that students need not buy individual stocks. They might also invest in a mutual fund, to reduce the risk of loss.

Web Watch: Log on to The Stock Market Game, a 10-week investing simulation endorsed by the National Council on Economic Education, at www.smg2000.org/