Logan Tullai, Stock Market Club co-president and junior, gives financial advice amid COVID-19 pandemic

Can you give a brief overview of your experiences with finances, whether that be through stock trading, classes or otherwise?

I don’t have any formal class experience in school with trading or anything, but I’ve had a brokerage account since seventh grade, and there are a number of really good resources that we use in Stock Market Club. There’s a program I use on Fidelity with my brokerage account, and they have some really great training programs. I’ve also talked to my dad about stock trading, and I’ve just put some of my savings in that brokerage account and I’ve managed that since then. It’s really been a very good experience. 

Within Stock Market Club, we usually use Investopedia and that’s really a great resource. It has a lot of different resources on there too that people can use to learn how to trade or learn about market theory and things like that.

What have your experiences with the stock market been like recently, especially in light of current events such as COVID-19 and resulting market crashes?

A really big percentage of the U.S. gross domestic product arises from consumer spending and with COVID-19 keeping most of the consumers at home, a lot of the consumption is going to go missing from the economy over the next several weeks and months. But it’s not just the inability to shop that’s going to keep the consumer portion of the economy down, it’s the shelter-in-place orders that also impact businesses and workers, many of whom are not able to stay open or work, which ultimately results in employee layoffs. Only full-time workers who are laid off in the United States are entitled to unemployment insurance and even these will get a small portion of their normal pay from those programs. Furthermore, gig economy workers and those who rely on part-time or overtime work can’t rely on unemployment insurance and those portions of their income will go missing from the economy as well. Those impacted employees will have to make do with less, or worse, no income, and that’s going to impact the economy in a major way. 

All of this will come back after the infection curve levels off and things get back to normal, but at the moment, it’s kind of unclear what that timeframe is going to look like. It could be a few months from now. I expect the stock market will continue to be volatile and head in a downward direction until the number of infections levels off and it’s clear that the country has a plan outlined that’s going to be effective. At that point, once things have leveled off and it’s clear that we’re on the winning end of the crisis, the market, I anticipate, will rally, but it’s unclear—at least at this time—how much and how fast. That’s really kind of a tough thing to predict, just because things are evolving so quickly. So up until that point, I expect things to go downward and be relatively volatile.

What sparked your interest in stock trading in seventh grade?

It seemed like a good time to learn while I’m a kid, so I’m ready for that in the future, and it’s a great time to practice with money that I had saved. It was an ideal time to get started learning that before I needed to do the same with money that’s going to be really important for my future.

What do you think is the importance of having financial literacy classes for high school students?

Financial literacy is a pretty big topic, and it’s much larger than the scope of stock assessment and trading that we do at Stock Market Club. It’s really important to understand the broader context of financial literacy, since you really shouldn’t trade stocks with money you can’t afford to lose. Understanding how much money you need today and in the future and how you’ll earn and keep that money is the outcome of that understanding of financial literacy, and trading stocks seems like a really small part of that overall financial literacy.

What are your thoughts on having financial literacy classes as required for high school students? Do you consider economics classes as part of financial literacy?

Personally I don’t have any experience with those classes, so I don’t think I’m the best person to answer that question. But I guess in terms of my own experience, I’ve done just fine without those classes, but again, I have been able to discuss those kinds of things with my parents. Using online resources like Investopedia can also help you learn about the things that you need to learn about.

I have taken AP Macroeconomics, but I feel like that gives you a broader sense of how the market functions, not really the stock market, but the economy as a whole. It gives you a macro perspective and I feel like it gives you a good context, but it’s definitely not necessary (for stock trading) because the stock market’s kind of a niche area of that broader understanding.

Has the current crisis with COVID-19 impacted your thoughts on whether or not financial literacy should be required for high school students?

Yes, so I guess it’s even more of a reason (to learn financial literacy). Especially if you are beginning to trade stocks—and again, that is a small portion of financial literacy—but if you’re looking at it from that perspective, you just need to really make sure that you know what companies you are investing in. Understanding those things are always essential, but especially during a crisis like there is now, that’s even more essential. You really need to do your research, especially when things are so volatile like they are now in order to potentially anticipate those changes in what governmental plans are being put into place, how that might affect whatever company’s ETF you’re investing in.

Do you have any advice for high schoolers looking to explore stock trading?

For people getting started, just go ahead and start. Anytime’s a good time and if your parents have a brokerage account, it’s pretty easy for them to set up and open up a sub account that you can fund with your savings. If they don’t have one, there are plenty of companies that do online trading and opening an account is as easy as filling out an application and sending a check to fund that base account. 

Or, if you don’t want to go as far as opening an account, a safer way—if you don’t want to do it with real money—Stock Market Club lets you do “phantom trades” with simulated investments. In Stock Market Club, we give you $25,000 of phantom money, and you can build and invest those funds however you wish. It’s not real money and it gives you a chance to see how your actions would play out in the real world if you did have those funds invested in those certain things. 

The most important thing for investing is building a hypothesis around a company or a group of companies that interest you. There’s a lot of online research sites that allow you to learn about those different companies and compare their returns and plans. Personally, I like to look at a lot of biotech companies that are pioneering new cures for different diseases, while others like to focus on software companies or companies that manufacture goods, or even services or retail companies. So, doing that research is important. I would definitely say that using those online resources is a great way to start.

Do you have any additional comments?

If people are interested in Stock Market Club, you don’t need any prior experience. It’s a fun environment to test your market theories against others in a risk-free environment and see if you’re a good stock picker.