Taking Advange of the Collapse
By Lauren Silverman - Jan 14th, 2009 at 5:09 pmFor most people, the economic crisis has understandably been a source of frustration and rage. It has meant ripping up the finance section of the Wall Street Journal, shutting off the TV when stock numbers appear, and vowing to “get out of the market.” For some, it has even meant committing suicide.
I have been lucky–I haven’t lost my life savings, nor have I had to give up my house. Because I’ve fared comparatively well, I have been able to focus on one of the relatively minor positive sides of the crisis–on how it has served as an educational tool for me. Because of the meltdown, I am burying my face in the Financial Times, making flash-cards on price-to-earnings ratios, and joining on-line stock trading games.
Over the past few months, reporters have tossed around words such as “short-selling” and “speculation” so often they have become everyday jargon. At first, I ducked, dodging the unfamiliar terms and hoping they might disappear. Well, they didn’t; in fact, the vocabulary and related news stories began appearing in unexpected places–everywhere from Vanity Fair to Star (although Star chose to talk not about lost assets, but lost “cashola”).
I couldn’t escape the terms, so I decided to stand up and make an interception. I started my self-education quest in a traditional manner: I typed questions into Google. Surprisingly, this proved fairly successful–I learned that a hedge fund is basically an exclusive mutual fund, and that short-selling is essentially borrowing stocks in the hopes that you will be able to resell them when their price goes down.
A few weeks ago, I took the next step in my game plan and registered for a free online trading account at www.up-down.com. The site gives players $1,000,000 to virtually invest and practice trading techniques. I also signed up for a free 30-day practice account with Advanced Currency Markets, a foreign exchange dealer, and got a call from one of their representatives ten hours later to “follow up with [my] interest.” I’m guessing they don’t have too many people signing up for their services right now.
Three months ago, I hardly knew what NASDAQ was; today, I’m a bit stock-market obsessed. Instead of shying away from the market, like I probably should, I’m running toward it.
The financial crisis has been disastrous for the majority of Americans, and there’s no doubt that it has slimmed down my wallet. On the plus side, it has fattened up my stock-market knowledge. The economic turmoil sparked my interest in finances and economic jargon. Hopefully, the time I have invested in educating myself and playing online stock trading games will pay off–even if only with virtual money.
Lauren Silverman is a student at the University of Michigan and an Intern on the Center for American Progress’s Energy and Environment Team
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January 14th, 2009 at 9:44 pm