Investing in Their FutureMuhlenberg students get real-world experience managing others' money with the Investment Society
By: Brittany Risher Friday, April 23, 2021 10:00 AM
Many people might be leery to give a group of 20-somethings tens of thousands of dollars and trust them to make the money grow. But that's essentially what the Muhlenberg Investment Society has been doing for more than a decade—and with great success.
Founded in 2008, the society “provides students with some real-life experience of managing an investment portfolio,” explains advisor JC Fernandez-Seoane, adjunct professor in the department of accounting, business, economics and finance. While originally focused on stocks, former advisor Ed Baldrige, a retired adjunct professor of business, endeavored to make the society function like a fiduciary managing an endowment for a college.
Students who take Introduction to Portfolio Finance can join. Every spring, select students present the group's performance data to the Muhlenberg College Board of Trustee Asset Management Committee. The Investment Society meets regularly during the year, with specific students responsible for analyzing and reporting on different sectors of the portfolio. Along the way, they learn the process of setting up portfolio objectives and an investment strategy and become familiar with portfolio re-balancing techniques and performance evaluation tools.
Clearly, things are working, as every year from 2008 to 2020, the society has exceeded expectations, Baldrige says. Robert Cappadona '21, a finance major, business administration minor and vice president of the Investment Society, credits this success to the people and their strategy.
“We receive different ideas and opinions from our group of analysts who all have different skills that help with identifying viable investments,” he says. “Plus, our faculty mentors make sure that we use our resources effectively and follow the long-term, diversified approach that has served the portfolio well since inception.” In more recent years, this includes more ESG (environmental, social and governance), quantum computing, and software investing. By tracking and analyzing the portfolio's performance on a daily and weekly basis, the group remains confident to let their positions play out through times of volatility and uncertainty, Cappadona adds.
All of this helps students grasp more than they can from finance courses. “It is one thing to learn about common strategies and investment processes, but it is another thing to proactively prepare to act on information that leads to outperformance,” Cappadona says. “This includes distinguishing volatility from actual risk, as well as certain psychological principles that come with managing a portfolio.” That psychological aspect cannot be replicated in the classroom, he says.
Functioning as an investment management group and producing results has helped many students go on to successful financial careers, Baldrige says. It also helps current students as they take the first steps toward such careers. “When interviewing for financial internship positions, the experience of actively managing a portfolio has been a great asset,” says Kevin Olifiers '22, an economics and finance double major. “Additionally, the communication and interpersonal skills I’ve developed helped with networking and interviewing. The Investment Society is a huge resume booster while also actually teaching and allowing students to practice skills that will last a lifetime in finance.”