posted Dec 15, 2011 in ACADEMICS
McPherson College has hired a promising investment firm to manage $100,000 of the college’s endowment – the college’s own students.
The investments class at McPherson College has long learned about the principles of responsible fund management using “play money.” Rod Gieselman, associate professor of business, said in the past he’d encouraged the competitive spirit with a reward for good performance.
Thanks to a resolution by the college Board of Trustees to retain the spring investments class to manage $100,000, the portfolio management experience will be taken to a whole new level.
“It’s real money with real consequences and I think that’s going to elevate the level of seriousness that students put into this exercise,” Gieselman said.
As with any investment fund, the students will have specific guidelines about how much of an investment category they can purchase. And, like any investment advisor, the college could choose to entrust them with more funds or to cancel their “contract” with the class, depending upon performance.
“Within the parameters, I feel confident that these students – doing the research – have as much chance of success as a professional investment manager,” he said.
Before students make their stock selections, Gieselman will teach them the fundamentals of researching and analyzing a company’s stock – such as products, management style and the price of a stock compared to what it could be worth. He’ll also work with them on “rational investing” – that is, being able to analyze an investment without letting positive or negative emotions affect the decision.
Andrew Suits, junior, Henderson, Nev., is enrolled for the spring class and is excited to have a say in investing decisions that will have consequences in the real world.
“When you’re working with play money, you just hope you’ll get an A on the project,” he said. “In this you really have to be careful or you’re going to lose the school’s money – our money, essentially.”
Gieselman said that he would continue to update alumni on the class and keep them connected to the college, and Suits said he was especially looking forward to seeing how later classes continue to work with the endowment money.
“I think the coolest thing is to look back over the years and see how the money has changed and how the students have changed,” he said.
Regardless of what field the students in the class go into, Gieselman expects the skills will still be useful. After all, most people will be making investment decisions in some form, such as retirement investing.
“It’s practical, working knowledge,” Gieselman said. “That any working adult needs to have.”