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The highs and lows of the stock market are not for the faint of heart, but members of BW's long-running Investment Club, who manage a designated piece of BW's endowment, have faced bear and bull markets with the poise of seasoned finance pros.
The
value
of
the
club's
investment
portfolio
has
grown
from
about
$160,000
back
in
2006
to
more
than
$640,000
today,
with
fluctuations
along
the
way.
"The investment strategy of the club focuses on long-term investing and passive management," explains current club president Joe DiLiberto '20.
"The portfolio experienced many ups and downs since it was first established but continues to be profitable over a long time. Many great investment decisions were made in the past to get where our portfolio is today."
DiLiberto,
a
finance
and
accounting
major,
says
the
market
crash
in
the
early
days
of
the
pandemic
is
the
latest
white-knuckle
event
faced
by
club
members.
But,
it
has
turned
out
to
be
an
opportunity
to
learn
about
the
unpredictable
nature
of
the
markets.
"The portfolio took a huge hit back in March and the value went below $300,000. We were unable to access the Bloomberg terminals in Kamm [Hall] and could not conduct our usual analysis. We held everything that we had, and the portfolio started to increase in April," DiLiberto recalls.
"The members were confused about why the stock market kept going up while the economy was suffering. The Fed continued to pump up the market with stimulus and fiscal policy. The interest rates are near 0%, so many people do not want to put money into the bank because CDs and bonds do not pay as much."
He continued, "The second quarter this year resulted in one of the best quarters for stocks ever percentage-wise. Technology stocks thrived. Job reports were better than expected. Despite the coronavirus and high unemployment, the market moved higher due to stimulus and liquidity. The performance of the stock market this year became a great learning experience for everyone in the club."
DiLiberto says Investment Club is open to any student regardless of major. Each member is required to research and present a stock for members to consider. A lot goes into each pitch.
"A stock pitch includes an investment thesis, industry analysis and outlook, company overview, company news, financial performance, earnings and estimates, ratios, SWOT analysis, technical analysis and analyst recommendations," DiLiberto details.
Buy, hold and sell decisions are made by voting members with the mentorship of faculty adviser and finance professor Dr. Christian Nsiah, who vets the presentations for accuracy.
"Dr. Nsiah may provide guidance and feedback on the pitch, but the students decide whether to buy or sell a stock," DiLiberto says.
DiLiberto
notes
that
students
do
have
an
opportunity
to
be
less
conservative
in
their
investing
by
competing
each
semester
using
the
Investopedia
Stock
Simulator.
"Students are more aggressive in the simulation than when managing the endowment fund. In the simulation, students can invest in any stock, trade options and short stocks."
A prize is awarded for the club member in first place when the simulation is halfway over and when the simulation ends.
DiLiberto considers the Investment Club a highlight of his time at BW, one that helped define his career path.
"I have learned a lot about how to analyze stocks, make smarter investment decisions, understand how the markets work and control personal finances in my own life. One of my main career aspirations now is to help people achieve their financial goals."
The club also gave him friendship, a faculty mentor and a full-time job offer months ahead of his December graduation.
"This fall semester is my final semester at BW and being involved in Investment Club has helped me get an internship and a full-time position after I graduate. I have learned so much and made many great friends."
