__Investment Club uses $25,000 fund to practice trading, returns__
The rate of return on the Investment Club’s portfolio each year has been less than that of the market average. Overall, the club has seen a 5.7 percent annualized return on their investments since 2002. The greatest increase occurred from 2002 to 2003 with a 19.92 percent change. From 2004 to 2005, there was a -0.60 percent change. The data comes from Caleb Piatt ’09, the club president.
p. However, the club has to pay transaction fees of $80 to $100 every time a stock is bought or sold, according to Piatt. The stockbroker who handles the transactions is also the alumnus who donated the money, so “to attempt to move the money to an online account where transactions would be much less [expensive] would not be a very nice way of showing our thanks,” Piatt wrote in an e-mail to The Flat Hat. With these transactions fees excluded, Piatt calculated that the annualized return on the club’s investments since 2002 would be 7.9 percent.
p. The club’s portfolio began with “roughly $20,000,” Piatt said. In the early 1980s, Aubrey Mason, an alumnus of the College, donated [the] money to the business school, according to Investment Club faculty advisor Prof. James Haltiner.
p. “A student investment fund was established … students in the MBA Investments class in successive semesters researched stocks and made recommendations that were then acted upon. Some of the funds were spent on other activities like speaker forums or the like,” Haltiner said in an e-mail. Haltiner also wrote that after the funds went unused for several years, about $20,000 was given to the Investment Club.
p. Matthew Sass ’10, vice-president of the club, wrote in an e-mail to The Flat Hat that the club “was started with a large donation back in the early 90s, so we are technically an endowment fund. Money has been pulled from the club at various periods, leaving us with about $25,000.”
p. According to Piatt, the club holds weekly meetings at which there is a market update, discussion about the club’s portfolio, and opportunities for members to make presentations on stocks that they would like the club to invest in. PowerPoint presentations will include information on competitors and different variables. According to an e-mail from Malika Mukhamedkhanova ’09, co-treasurer of the club, all members decide which stocks to buy and sell at the end of the semester.
p. Members are divided up into different industries that then report on to the whole club, and the club recently added a game in which members “gain points by correctly predicting weekly and monthly stock price movements. As a member accumulates more points, [his] vote will have higher weight when it comes time to make portfolio decision,” Sass said.
p. Currently, the club is investing in eight stocks: Celgene, CURD, Wachovia, Noble Energy, Toyota Motors, Google, Oracle and Zicorp. According to Sass, the majority of the club’s money is invested with about $7,000 held in cash. About $2,500 to $3,000 is invested in each of the club’s stocks, according to Sass’s e-mail.
Mukhamedkhanova joined the club because she wanted to learn more about the stock market outside of the classroom. Nicholas Patin ’09 began investing during his sophomore year.
p. “I have actually done really well and I owe a lot of that to the officers during my first year. It’s always great being able to make money without having a job in college,” Patin said. “The things I have learned in the club will definitely help me down the road to retirement.”
p. Beyond the world of business, the Investment Club may soon play a role in the political arena of the College, according to Sass. “I am currently undersecretary for investment for the Student Assembly and am working with Caleb on expanding the role of the Investment Club to provide recommendations to and/or a partnership with the SA in [its] investment decisions, should [it] elect to pursue investment of excess funds in the future,” Sass wrote.
p. “Investing is more of art than a science,” Sass said. “The beauty of investing arises from the innovation in being able to see what other[s] can’t or haven’t yet, and profiting from it.”