Grades 9–12 · Lesson 4 · 60 minutes
Portfolio construction and diversification
Students design a portfolio with explicit goals, constraints, and risk limits.
StockSt uses fictional currency and simulated shares for education only. This is not investment advice.
Warm-up
Ask students to imagine three different clients: a student saving for a trip next year, someone saving for college in ten years, and someone protecting money they cannot afford to lose. Ask whether the three clients should hold the same portfolio and why not.
Mini-lesson
- Cover asset allocation, concentration risk, correlation, rebalancing, and time horizon, using examples from the StockSt categories.
- Stress that diversification can reduce exposure to any one asset but cannot remove market-wide risk.
StockSt activity
- Each student receives a fictional $10,000 portfolio and chooses an investment objective: growth, balanced, or capital preservation.
- Students build a portfolio with at least five simulated shares, a maximum 20% position size, and holdings in at least three categories.
- Students write a risk tolerance statement explaining why the portfolio fits the objective.
- Peer review: students critique another portfolio for concentration, category overlap, and unclear reasoning.
Discussion
Ask, “Which rule was hardest to follow, and what did it force you to give up?” Connect the answers to real portfolio constraints.
Exit ticket
Students answer, “Which position is your largest risk, and why?”
Assessment
Portfolio proposal and peer-review form. Jump$tart’s investing standards include evaluating investment alternatives and implementing a diversified strategy compatible with personal goals.
Student Learn links
Assign these before or after class so students practice the same ideas.