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Studying the Market: Juniata Investment Class Pays Dividends in Experience

(Posted October 17, 2005)

Pat Weaver, Charles A. Dana Professor of Accounting, Business and Finance

HUNTINGDON, Pa. -- For many college students, the biggest decision of the day is whether to wear sweatpants or jeans to classes. At Juniata College, the faculty and administration trusts the acumen and decision-making of its students so much that the college is giving a group of fledgling financiers $100,000 to invest by themselves.

"Many colleges and universities have investment clubs to give students investment experience, but typically the investments are approved and purchased through the college's financial adviser," says Patricia Weaver, professor of accounting, business and economics at Juniata. "Our vision for this course is to have students research and present an investment strategy, and manage the portfolio as an ongoing investment."

The new investment course, which debuted this semester, was made possible through an anonymous donation of $100,000. The donor felt that few students emerge from college with a thorough knowledge of how investments work and asked the college to create a course that will educate all students about investments, yet also offer hands-on experience.

According to Weaver, who serves on the college's investment committee (which makes decisions about investing the college endowment), the course will be structured as a series of three one-credit courses.

--The first course, Investing Your Future, is designed to be an introduction to the principles of investment. The course will cover how to invest, and more importantly, the elements that result in a sound, prudent investment.

"Every college graduate is going to be asked to make investment decisions, whether they are working in the stock market or deciding where to focus their 401K," explains Weaver.

Weaver also team-teaches the introductory course with Paula Beckenbaugh, who oversees Juniata's student teacher candidates within the education department. Weaver and Beckenbaugh created the course so a teacher with major investment experience (Weaver) and a teacher with minimal investment experience (Beckenbaugh) could complement the financial lessons. "Paula can tell me to put on the brakes and explain a point again," Weaver says.

--The second course component, tentatively titled Investment Analysis, will focus students on how to rate an investment and how to analyze and present an investment portfolio. In addition, the students will design and maintain a Web site that will track the college's investment in real time. "The Web site will be open to the public, so the students will have to be responsible managers and analysts," Weaver says.

--The final segment in the investment course, Portfolio Management, gives the students the authority to make trades and investments. Weaver points out that each student authorized to trade will be bonded. The investment team also will make a portfolio presentation to an external audience.

"The big question people will ask is 'What happens if they fritter away the $100,000' and my answer will be that by the time they reach the third class, they will know how to make responsible decisions," Weaver says. "We are not teaching the students to be day traders, we are teaching them how NOT to be day traders and make prudent decisions."

The second level of the course will debut in fall semester of the 2006-2007 academic year, and the third level course will be offered in spring semester of that year.

By teaching the academic analysis behind stock market and other types of investment, Weaver believes students will be able to ignore "conventional wisdom" arguments that often dictate stock trading. "A lot of strategies that brokers say are sure-fire have been proven not to work," she explains. "In a way this will be much more freeing and instructive -- the students don't have to be Wall Street insiders to be able to grow an investment."

Weaver says the entire sequence of courses will appeal across all disciplines, from business students to history majors. The two upper level courses also will be interdisciplinary, but she envisions the third segment as primarily a business course. "Everybody has to make these investment decisions these days. Sociologists and historians have to be able to decide if they can afford a new car or whether to invest in gold, just like everyone else."

Contact John Wall at wallj@juniata.edu or (814) 641-3132 for more information.