The Student Managed Investment Fund (SMIF) of Catawba College held its second stock market competition recently, with the two student winners building portfolios showing gains in a down market.
The five-month competition, from late October until early March, offered all students the opportunity to learn about investing, discuss trading strategies and dive into the financial markets. A total of 17 students participated and traded $100,000 in virtual cash in the stock market.
Jackson Raper, with a total return of 6.37 percent, won first place, and SMIF's Vice President Lukas Helbing, with a return of 3.06 percent, won second place. The stock markets performed poorly at the end on 2018 and into 2019. In December, markets recorded one of their worst performances since the Great Depression, with indexes dropping up to 20 percent.
Raper acknowledged the poor performance in the stock markets during the competition and took it into account in his strategy. His portfolio value grew to $106,368.
"When examining what stocks, I wished to invest in, I first looked at the time frame of the competition," Raper said. "I knew that over several months' time, there was room for growth, but I couldn't be too risky and swing and miss on too many picks. Following the initial start of the competition, the overall stock market took a huge loss but has since rebounded. One of my big winners for the competition was Alteryx Inc., a computer software company specializing in data science and analytics. Alteryx stock has grown over 30 percent since the beginning of the competition. Another big winner was Twilio Inc., a cloud-based software development company. Over the course of the competition, Twilio stock grew over 50 percent."
Helbing minimized his loss in this bear market through diversification and took advantage of the market's recovery at the beginning of the year. His portfolio value grew to $103,057.
"At the beginning of the competition I was trying to diversify my portfolio as much as possible," he said. "I invested in financial services, the movie industry, the health care industry and in electronics. Through my diversification and these industries being stable throughout financial instability, I was able to maintain a strong market position. At the beginning of 2019, with the market recovering and already having outperformed the market, I decided to sell my stocks and invest in ETFs to use the general economic growth to improve my return."
The stock market fluctuations over the past months have also affected SMIF's real investment portfolio, managed by student members, according to Luca Picci, the president of SMIF. "This year has given us a real learning experience," he said. "The bull market that ran for the past decade came to a halt, and our strategy had to change. We have maintained our value investing strategy to find undervalued companies and long-term investment opportunities, but we needed to be much more considerate of global, political and economic factors. Overall we have managed to maintain a positive return that is significantly higher than the market."
For more information on the Student Managed Investment Fund, contact SMIF faculty adviser Eric Hake at erhake@catawba.edu.
