The stock market games kids play in school don't always teach them the right lessons.

I should know. As a high school history teacher, I ran one of my own. At the time, I knew almost nothing about stock investing, but it was October 1987, and the stock market had just plunged more than 20% on a single day. I brought out the stock section of the newspaper, and had my students pretend to invest a sum of money on the stocks of their choice, tracking their progress over the next few months.

That was a mistake.

Problems galore
Unfortunately, the game I ran only involved short-term investing. In the short run, the market can do anything. Good companies can fall, while shaky companies can soar. If they only dip a toe in the market for a few months' time, newcomers can walk away with many misconceptions.

Witness how these companies, which would have been familiar to teens in 1987, did over the three months after the crash, and over the 23 years since 1987. (Note that I selected the companies before I filled in the rest of the table.)

Company

Price on Oct. 19, 1987

Price on Jan. 18, 1988

3-Month Return

23-Year Avg. Annual Return

Disney (NYSE: DIS)

$46

$60.88

32.3%

9.3%

Boeing (NYSE: BA)

$38.50

$42.75

11.0%

10.4%

Gap (NYSE: GPS)

$22.75

$21.12

(7.2%)

18.1%**

McDonald's (NYSE: MCD)

$36.38

$44.38

22.0%

12.0%

Coca-Cola (NYSE: KO)

$30.50

$39

27.9%

12.4%

IBM (NYSE: IBM)

$103.25

$117.75

14.0%

7.6%

Kellogg (NYSE: K)

$39.25

$50.88

29.6%

8.5%

S&P 500 (index only)

     

6.1%

Data: Yahoo! Finance. Prices not adjusted for stock splits or dividends.
**Over 22 years.

Jumping to conclusions
Students reviewing the three-month results above might have assumed that Disney was a better long-term proposition than Gap, given the latter's three-month loss. Yet Gap ended up outperforming Disney over the longer term. More importantly, the students would never have been able to see the true power of big blue chips.

In truth, even the long-term return figures wouldn't have been enough. Returns vary over different periods. Some companies grow briskly for a while, and then fizzle out. Coca-Cola and Gap have both suffered protracted sluggish spells.

While my critique applies foremost to school stock market games, this lesson really applies to all of us. Drawing long-term conclusions from a stock's short-term performance is rarely a good idea.

The upside of stock market games
Don't panic -- students aren't doomed if they learn about stocks via a game like the one I ran. A little context from the teacher can make a big difference in the kids' understanding. And even flawed games can still teach students the important math and mechanics behind investing.

A little creativity might also improve the scenario. Teachers could ask students to imagine that they'd first invested 10 years ago, then pretend that each week in class is a year, fetching the "latest" stock prices from historical records. That method could much better illustrate stocks' long-term fortunes.

Of course, it's also helpful for students to discuss companies along the way, especially in a long-term context. What happened at Gap to make the company's revenue shrink over time? Did its offerings go out of style? Did fickle young customers abandon it?

Think about how you learned about investing. Odds are, you drew some big conclusions from your early experiences. Perhaps you've been trying to unlearn some of them over time. Learning good investing lessons right off the bat can make a big difference in a student's financial future.

Tell us about your earliest investing experiences -- leave a comment below!

Longtime Fool contributor Selena Maranjian owns shares of Coca-Cola and McDonald's. Walt Disney and Coca-Cola are Motley Fool Inside Value picks. Walt Disney is a Motley Fool Stock Advisor recommendation. Coca-Cola is a Motley Fool Income Investor choice. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.