Student Investment Group closed their portfolio with over $300,000 this summer, reaching past their initial goal for the semester.
The group was established back in January of 2001 from a student’s idea. With the help from Richard Halberg, Professor of Business Administration and certified financial planner, it was passed onto the board of trustees which lead to the ultimate approval of the Student Investment Group (SIG). They were given the opportunity to manage a small portion ($25,000) of the Houghton College endowment, allowing them to participate in real investments. SIG is “treated as one of the other college money managers”, says Professor Halberg. “So how the money is used is ultimately decided by the board of trustees and the college administration.”
Each semester SIG decides on a new dollar amount based on the previous semester, this new amount then becomes their goal. Last semester the group went passed their goal. The group started out with $256,819 as of January 1, 2013 and was able to pass the $300,000 goal. John Carpenter, a member of the Student Investment Group since 2012, said, “It’s an amazing achievement. Whenever we reach one goal, we always set a newer, higher one. It’s really cool to be able to set a benchmark and reach it as a group.”
Veronica Gerace, a business major, expressed her opinion on this achievement, and said, “When I visited Houghton and learned about some of the programs in the business department, one of the things that impressed me the most was the student investment group. They’re a part of what makes our department so great, and I’ll be happy to watch and see what they can do with the group in the future.”
As Halberg said, this opportunity can be very beneficial to the students as they learn to invest with real money and deal with all the pressures it comes with that enterprise. In addition, the opportunity adds an interesting addition to their resume. Only a small percentage of business and accounting students get to have this experience while being an undergraduate. This opportunity “sets the students apart,” said Professor Halberg.
John Carpenter said, “not only are we learning different techniques and developing our own investing philosophies, we are learning how to interact productively in a group setting.” The group has to build off one another, overcome problems along the way, and in the end come together to make a final investment decision as a whole.
The group decides which companies to invest in by following “a set of guidelines determined by Professor Halberg and members of the board.” These guidelines describe the “types of companies that we are not allowed to invest to stay in line with the Houghton’s standards and community covenant. Other than that, we have free reign over who we can invest in,” says Carpenter.
SIG invests in a variety of companies, from well-known names like Johnson and Johnson, Kraft Foods, and Microsoft. The decisions are all based on ideas, research, and stock screening the students have done. Each member comes into the group with their own different strategies and so when it comes down to researching investment opportunities, “there is no telling who might bring what company to the table to invest in” said Carpenter. “That is part of the fun of the whole process. We are able to use the things we have learned in other classes and apply them to our research.”