Senior Chris Zou explains COVID-19’s effects on stock market, personal experience with trading

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

So with stock trading, I technically started doing it several years ago, but I didn’t really do anything with it. It wasn’t until earlier this year, senior year, that I started getting interested in watching (the stocks). In the past six months or so, I’ve just been following the market and trading stocks here and there, and just being a lot more interested than I was for the past four years. 

In terms of classes, economics and finance are kind of related—they’re not really that related, but I guess if you want to take it that way, I am taking macroeconomics and microeconomics both this semester. (Those classes) are more loosely related (to financial literacy) in my experience.

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?

Ask anyone, and they’ll tell you they’ve lost a lot of money. For me, this is more of a learning experience because I have a safety net, right? If I lose money, whatever, I have my parents backing me up. I’ve lost a lot of money, obviously. The Dow was down like 32% in the last month, down roughly 10,000 points total. My (stocks) portfolio is down like 30% or something. Everyone’s losing money. 

But for me, it’s really more like a learning experience. It’s really interesting to watch. How do people react to tragedy? How do people react to a crisis? In the future, it might not be a virus. It might be another—let’s hope there isn’t—but there might be another terrorist attack, or if there’s another recession or something, at least you can understand a little bit of how people might react and how the market will move. So one of the takeaways is, in times of crises, I feel like the state of the market reflects a lot more panic and a lot more negativity than what is really going on, and politics plays a lot into this as well. That’s just my experience with coronavirus. It’s interesting to watch. I’ve learned a lot.

What sparked your interest in stock trading in the first place?

I think at first, I started around five years ago because my brother works in finance and he was like, “Hey, you should do this.” Okay, whatever. I didn’t care. And so that was the start. 

But then earlier this year, starting senior year, I was like, “Okay, I’m a senior, I’ll be going to college soon, and I think it’d be really good for me to actually kind of understand and get involved in world events.” I started following the news, started reading New York Times, you know, just staying aware of the current events. And from that, as kind of an extension, I was like, “Wait, I know all this about current events, about politics—why not learn a little bit more about the market?” From there I was like, “Okay, I can pick up where I left off four years ago when I just started.” and I just started doing stocks again.

Given the experiences you have gained as a high schooler who trades stocks, what do you think is the importance of financial literacy for teenagers?

The stock market can be kind of scary. For me, I play it now so that in the future, when we start having a 401k, we start having an RA, and we start to look into retirement funds and stuff like that, (stock trading) is something that we have to be concerned about because that’s the way you accumulate money in retirement funds. You invest in the market. When we have kids and stuff, you have to consider the 529, the college fund—that’s also based in the market. I think these things are really important. 

In the future, if you want to manage your finances well, if you want to make money off of what you have, I think it’s really important to understand how the market works—at the very least learn the basics and maybe do some basic training. You don’t need to do anything risky, right? You can just put it in. The main tickers, like Dow Jones and S&P 500, you can pretty reliably assume they’ll just grow as time goes on as long as there’s no mass panic or whatever. 

Aside from these investment funds, and retirement things, I think it’s just good in general to have a grasp of how the economy works because then you can be an informed consumer of the news, of politics, and things like that. I think it’s really important to have a well-rounded worldview on finances and your life in the future.

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

Make sure you know what is going on in the world and do your best to read up on it. Like, yeah, I’m sure we all know, the coronavirus is going on and maybe there’s gonna be a recession, but really look into it. What are people selling? Like oil is down a lot (right now); why is oil down a lot? The Zoom company—(its stocks are) up a bunch. Like that’s an obvious one, but really think about these things on a daily basis. 

If you want to start trading, I would recommend trying out Robinhood, that’s a popular one I use, some of my friends in Carmel also use that as well. Then just ask your parents for a little bit of money, and you don’t need to do anything big—you don’t need to invest in Microsoft and put in $200 or Amazon from the thousand. You can just do something small. But just be educated. Inform yourself. Learn a little bit more about the world and about the economy and about current events. I think that’s a good place to start.

What do you think is the importance of having financial literacy classes, and should they be required?

If you look at economics, I think it can help you understand what is going on, but I don’t think the knowledge I’ve learned in those classes have helped me make decisions when it comes to trading. I do think that having economics courses is pretty useful, so kids can have a more general understanding. Let’s say 10 years from now, you know, we’re like the voting class. I want all my peers that are voting to have a grasp of what is going on. I don’t want people to just think about, “Oh, Republican, Democrat, I’ll just vote either way.” I want people to understand, like, “Okay, these are the policies, this is what’s going on in the economy, and this is why I want to vote X, Y and Z.” I want people to understand that. 

And if we can have finance classes related to trading, I think it’d be cool, but I don’t think it’s necessary. While finance is useful and knowing how to trade is useful, you can live a life pretty well without it. On a general scale, economics is probably more useful in general than finance. So I think having economics classes is really good and having finance classes would be cool, but I also feel like the interest group wouldn’t be super great. I feel like there are not that many people like me, who are super interested in trading on a daily basis. Yeah, I think it would be cool, if we could have finance classes and then maybe some more economics classes, it would be great as well.

What have you learned from stock trading, related to finances or otherwise?

 I think the most important thing I’ve learned is that you have to be well-informed to trade well. Like there are things out there like this subreddit called WallStreetBets, and there are people on there saying, “Buy this,” “Sell this,” “Call this,” “Put this,”  or whatever, but I think if you really want to be like a successful trader, if you just want to trade for yourself and learn what is actually going on, I think you just have to be well-informed about what is going on in the world. I think that’s one of the biggest takeaways I have. It’s impossible to trade without knowing I follow the news a lot, I think, you know, compared to the average high schooler, but even what I know is not nearly enough. I’m looking at my brother and this guy’s following the Federal Reserve like religiously. When any company is announcing earnings or something, my brother’s watching that. 

I think just the biggest takeaway is, you have to be informed about what’s going on. If you want to really get into a particular industry or a particular company, you have to dive pretty deep.

Do you have any additional comments?

For anyone that’s trying to get in(to stocks), don’t be scared. Stock market’s not that scary. You know, I’ve lost $1,000 in the past month. Whatever, you know—you lose $1,000, just be smart, and after the coronavirus goes away, just make (the money) back. But yeah, don’t be scared, but also don’t be stupid. For anyone who’s trying to get in, that’s all I have.