Who Made Money During Last Year's Turbulent Stock Market? Westminster College Students Did
Salt Lake City, October 4, 2001. Fifteen colleges and universities participated in D.A. Davidson's Student Investment Fund Program, but only one school produced positive gains. Students in Westminster College's Investment and Portfolio Management course earned top accolades as their portfolio out-performed the other institutions, as well as the S&P 500.
Finance students in Westminster's Bill and Vieve Gore School of Business had the opportunity to invest $50,000 in real funds, creating a working stock portfolio over the past year ending August 31, 2001. Each of the 15 colleges and universities from the Western United States participating in D.A. Davidson's Student Investment Program experienced losses ranging from $2,000 to $37,000. Westminster College was the only participating school producing a positive return, totaling $1,505, or 3.01 percent. For comparative purposes, the S&P 500 produced a net return of ?24.38 percent.
"While the student's return on investment was only $1,505, it represents a significant gain compared to all of the other schools participating in the D.A. Davidson program," said Dr. James (Cid) Seidelman, Dean, Bill and Vieve Gore School of Business. "The positive return is also a noteworthy accomplishment given the turbulent market conditions during the previous year. However, more important than the dollar amount of the return is the practical experience the students gained by developing a winning investment strategy, researching and investing in specific stocks, listening to investment professionals and tracking the fund's movements."
"The investment strategy of the class was based around the sectors of the S&P 500," said Jim Wheeler, managing partner, D.A. Davidson and instructor for the course. "We under-weighted or over-weighted the different sectors of the S&P 500, which is probably the reason why Westminster's fund out-performed the other school's funds."
Students in the Investment and Portfolio Management course are broken into five groups, each group responsible for tracking 1/5 of all the stocks in the S&P 500. After thorough analysis and research, the group selects two or three stocks from each sector of the S&P. The students then present a formal argument discussing the pros and cons of the proposed stocks. The class then votes on which stocks to buy. After selection by a majority-vote, the class projects a target price when the newly purchased stock will be sold. At that point, the class selects another stock from the same sector in order to maintain a balanced portfolio.
"I took the course because I was a finance major going into a career in investments and I though it would be very applicable," said Ashley Farr, a student in Westminster's Investment and Portfolio Management course. "It was long, hard work, researching and analyzing the different stocks and determining when to buy and sell them. The projects I worked on will come in handy both in my personal investments and my career."
Hands-on courses such as the Investment and Portfolio Management class typify Westminster's approach in providing business courses that mirror the real world. MBA students manage the fund part of the year, but undergraduate students manage it during the remainder of the year, offering a unique, hands-on experience early in their academic career.
D.A. Davidson replenishes the original $50,000 for each college or university on a yearly basis. The firm splits any returns above five percent and shares those with the school.
Westminster College, Utah's only private, nondenominational, nonprofit college, prepares its 2,500 students for personal and professional success through a foundation of liberal education, combined with professional programs that include vital technological and communication skills. U.S. News & World Report has ranked Westminster in the top tier of regional colleges and universities in the Western United States for seven straight years.