1/18/2010 2:51:00 PM Student-led investment fund gives practical experience
Evangel students, from left, Joshua Young, Melissa Hogan and Mark Budler are among those managing the school's new investment fund. The fund started with a $5,000 donation in 2007 and will eventually serve as a source for endowed scholarships.
A $5,000 donation is offering some invaluable real-world experience to about a dozen Evangel University students.
Donated by 1967 alumnus Raymond Schmidgall of Mason, Mich., in 2007, the contribution served as seed money for the Student Investment Management Fund. Schmidgall holds a Ph.D. and is a certified public accountant. He is the Hilton Hotels Professor of Hospitality Financial Management at Michigan State University's Eli Broad College of Business.
The fund is directed by the students with oversight by volunteers and Evangel faculty.
Eventually, the fund will become an endowed scholarship, offering financial assistance to students interested in pursuing a career in finance.
For now, the primary objective is for students to invest those funds wisely and watch them grow.
The growth of the fund - which students started investing in fall 2009 - got a boost in December from a $2,000 donation from the Assemblies of God Credit Union.
Paul Ebisch, chief financial officer for the AGCU, said the credit union decided to make the donation because it fits well with the institution's mission.
"Credit unions have a lot of focus on financial education inherently," Ebisch said. "And so when it came up as being part of an opportunity to partner with Evangel as part of a financial education for the college students, that made it for sure a good fit."
Bernie Dana, an associate professor of business who helped establish operating guidelines to get the fund-investment program started last year, said he expects other donations to soon roll in. "It looks like we'll have that fund up to $15,000 fairly quickly," he said, noting that it took awhile to get the fund going.
"That's the embarrassing part of this. We actually got the initial investment two years ago. We sat on it because we did not have a model for the operating guidelines," he said.
"The blessed part of this is we didn't have the money in anything other than interest-bearing accounts during the downturn of the market, so we did good," Dana added with a laugh.
To get the Student Investment Management Fund program up and running, Evangel tapped 2006 alumnus Derek Schmidly, principal adviser at Auxan Capital Advisers LLC. While pursuing a master's degree in business administration with an emphasis in finance at the University of Missouri, Schmidly participated in a similar program.
"His participation was the key," Dana said. "He helped us find that model and create the structure and the accountability that we need because it's an endowment fund."
Fund management is not tied to specific majors, and any Evangel juniors and seniors who are interested in finance may apply to participate. Dana said eligibility may extend to sophomores next year.
While students receive no compensation or course credits for participating, they do get the real-world experience that sometimes is lacking in classrooms, Dana said.
That practical experience was the primary allure for senior Joshua Young, a management major from Beavercreek, Ohio.
"Since I was a little kid, I've been really interested in the stock market and investments, which I guess is kind of weird. I thought it would be a really good opportunity to get some experience in investment analysis and how the whole thing works," said Young, who serves as the group's economist.
He likened his involvement in the fund to an entry-level position for a career.
"It just helps you understand all the ways out there to analyze the market overview of investment products," Young said.
Much of that understanding is generated by Schmidly's volunteer efforts. He spent several weeks meeting with students and teaching them how to analyze market factors.
The students meet every other week to present and discuss their research and to vote on whether to invest in a particular stock or market sector.
"I don't tell them what to research," Schmidly said. "I provide them a structure to write the paper and present it to the group."
While Young fills the role of economist, there are two other leadership slots, portfolio manager and CEO, filled by junior Mark Budler, of Rogersville.
"It's going pretty good," Budler said of the group's progress. "It was a little slow going (initially) because it was something new and people were kind of timid."
But that uncertainty is part of the educational aspect of the fund, Dana said.
"There's some limitations on the kinds of risks that can be taken," Dana said, pointing out that 70 percent of the fund must be invested in sector stocks with the remaining 30 percent invested in individual companies.
Still, whenever the market is involved, there is an element of risk.
"That's part of the deal," Dana said. "They get to take the risk."
