Move over Morgan Stanley and Merrill Lynch, Hiram’s investors are the new “bulls” on the block.
The aspiring financial wizards of Hiram College’s Investment club have racked up solid gains on the stock markets this year, steering of their portfolio to rates of return of 20 percent or more in trading.
The Club, which is open to all students, regardless of majors or areas of study, gives students the opportunity for “real world” investment and financial management experience, because they make all the investment decisions and do all the market research to support those decisions without help or guidance from advisers or professionals.
The students were provided with a $100,000 stake from the College’s Board of Trustees to use to buy stocks bonds, options, or any other issues, and managed the holdings to a 20 percent return. The portfolio was managed completely by the students, with no help from instructors, or financial professionals.
“Each student would select and research a company and then make a proposal to the rest of the group,” said Bristena Marinescu, ’11 a member of the club. “Then we would discuss it and vote on whether to invest or not.”
Wenhao Li, ’11 president of the Club, said investment in some familiar companies really helped chalk up the significant returns.
“We did well with Chipotle, Apple and Netflix this year,” he said. “Apple was especially good.”
While this year’s Club had success, they followed on the heels of a winning performance by the 2010 Club too. Hiram’s student speculators last year managed a $50,000 portfolio as part of a competition sponsored by Oak Associates, an Akron-based financial firm. Hiram’s investors won the competition for the second time in five years against teams from the University of Mt. Union, Ohio Wesleyan University and Duquesne University in Pittsburgh. The Hiram investors racked up a 24 percent return in the Oak Associates portfolio, in which investments limited to equity securities.
“The kids did a phenomenal job of picking winners this year,” said Earl T. Kissell, Assoc. Professor of Economics, the Club’s adviser. “The students made all the decisions and will be presenting the results to the Board of Directors May 12.”
Each year, besides managing the funds, the club travels to a market city to see trading in action and visit with professionals. This year the Hiram club visited Chicago’s Mercantile Exchange, and met with professionals at Neuberger-Berman, a mutual fund management firm, and Aurora Investments, a Chicago hedge fund manager.
But as valuable as the experiences were, the Hiram investors were, you won’t see any of them cruising campus in a new Lexus anytime soon. All profits from the students’ trades, as well as the original investment stakes are returned to the Board of Trustees for the College’s endowment.