A group of students at the University is playing the stock market, practicing their investment strategies, discussing market trends and evaluating their portfolios – but this is not play money.
The University of Oregon Investment Group, run by undergraduate students, is testing the market firsthand with real cash.
The UOIG, first formed in 1998, held its first weekly meeting of the 2006-07 school year Friday to overview its three current portfolios, all of which have been open for years.
The Tall Firs portfolio has grown from an initial value of $400,000 in 2002 to a current value of more than $683,000, UOIG member Andreas Reinsch said.
“That’s kind of our pride and joy,” said Matthew Hutt, director of operations for the group.
Most of the group’s money originally came from donations to the UO Foundation and the Board of Trustees, UOIG Faculty Advisor Larry Dann said.
Currently, the group is taking part in the Student Investment Program competition with 16 other Northwest schools through D.A. Davidson & Co. (DADCO), a financial consulting firm based in Montana.
Starting each September, DADCO donates $50,000 to each participating school to invest in the markets as they choose, and the school that earns the largest profit is declared the winner. But UOIG has more than bragging rights as motivation to invest well; the group is allowed to keep half of any profits in excess of $52,500.
By the end of last year’s competition, which ended Aug. 30, the group netted a 7.73-percent increase for a final total of $53,865. Though the group can’t directly follow the progress of other schools in the program, Hutt said, DADCO informed the group that it had brought in the third-highest total as of June.
The UOIG is also off to a fast start in this year’s program. It has already seen a 4.27-percent increase so far, only one month into the contest.
Dann said he is impressed with the professional attitude the student-run group takes toward its investments.
“It is amazing how much poise and discipline these students have at the end of the year compared to the beginning,” Dann said. “There’rea lot of learning benefits to the students.”
Dann said some of the group’s success comes from its somewhat meticulous approach to spreading its investments, while some other schools may use a more high-risk, high-reward strategy of putting a lot of money into one area. He also said students are careful with their investments.
“You don’t want to make buys simply because you have money,” Hutt said. “You want to put them in things that are going to help you.”
Dann said being a member of the UOIG can be intense, since some members come under considerable criticism from the rest of the group when making analysis reports and giving advice during weekly meetings. Still, he said, the scenario forces students to come prepared and provides benefits in the long run.
Erin Hoffman, director of human resources for the group, said there is also a lengthy application process to get in. She said students usually attend an information session first, then must submit an application with a résumé and cover letter before they are interviewed by two to three UOIG members.
“We definitely do like it when people have financial knowledge,” Hoffman said.
“It helps.”
Hoffman also said the group tries to operate like a professional investment group as much as possible.
“Not only is the information that we deal with difficult, we have a very set way of doing things,” she said.
Dann said UOIG members have embraced the high level of responsibility placed on them by having complete freedom to make their own decisions.
“One of the things I see is that the students really
rise to the challenge of that opportunity,” Dann said.
The UOIG will make a three-day trip to New York City in December to meet with several financial advisers and tour the New York Stock Exchange.
Contact the business, science and technology reporter at [email protected]