The stories in the Student Books and library books include only decodable words and the few Memory Words (sight words) that children have been explicitly taught in the current unit or previous ones. Controlling vocabulary in this way ensures that children are able to read every word they encounter in the stories. This builds children's confidence in their ability to read independently.
Memory Words are high-frequency words that children cannot decode, but must instead memorize how to read. Some Memory Words are never decodable and some are words children need to read before they've been taught the letter-sounds in them.
No. Having children memorize lots of nondecodable words will diminish their confidence in their decoding ability. Developing the habit of decoding is so critical for children's continuing success as readers that it is important not to undermine it.
