Tuesday, June 25, 2013
SAIFE investment competition builds smart financial foundation
This spring 22 teams of more than 50 Oakland University students took part in the Society for Applied Investing and Financial Education’s (SAIFE) 2013 stock trading competition.
SAIFE, a business school student organization, sponsored the eight-week competition where participants gained first-hand experience and valuable insight into how the stock market works without the risks typically associated with investing by using a trading simulation program that uses real-time stock prices.
Each team or individual entrant began the competition with $100,000 to invest. Prizes for highest returns were awarded as tuition credit in the amounts of $1,000 for first place, $600 for second place and $400 for third place.
“Each team could see how the other teams did, and SAIFE members monitored daily market value of each team that is automatically collected in real time,” says SAIFE faculty advisor, Assistant Professor of Accounting Seong-Yeon Cho.
For example, as a snap shot one day early in the competition, one team recorded $105,065.78 balance, showing an return of more than five percent in less than a month – or 60 percent annual return.
Phillip Johnson earned the top spot posting a six percent return over two months with a position held mainly in stocks of Allscripts Healthcare Solutions, Integrated Electrical Services and Qualcomm. The Fearless Team took second place with a five percent return. Third-place winner, Team Acho, earned a four percent return.
“As a reference benchmark, SAIFE formed a portfolio and earned eight percent with positions in stocks such as Perrigo, Skilled Healthcare Group and Direxion Daily,” Cho says.
Johnson, a junior majoring in business economics and SAIFE member says, “Playing the stock market was something I was always interested in. During the competition, I definitely saw the emotions that go behind making decisions when you’re trading. It was a good experience.”
At the start of the competition, Johnson notes he invested with confidence, feeling he had nothing to lose. Once he took the lead, he found it more difficult to make decisions about buying and selling.
Though the competition is open to all OU students, this year’s competitors were business school students.
Second place winners -- The Fearless Team -- included Bella Koleva, Steven Sipma and Nicolette Lojewski; while Kyle Acho represented Team Acho.
In the weeks leading up to the competition, Cho led a series of training workshops on stock market trading cases and fundamental analysis tools to give students a foundation in investment principles based on accounting and finance knowledge.
SAIFE teaches students the basics of financial investing as well as helps members avoid potentially devastating financial missteps by offering them a safe way to practice their new-found skills. Through organizations like SAIFE, students can gain the experience and confidence that leads to good decisions, protecting them from debt and allowing them to build wealth.
SAIFE offers a unique combination of portfolio management, guest speakers and faculty and professional advisor mentoring, all directed towards its goal to equip OU graduates with the basic tools required to help them build a stable and successful financial future.
SAIFE’s investing activities, along with its other programs, reflect the SBA’s key foundation themes. The hands-on experience gained through managing a portfolio of real money ties in with the SBA’s goal of providing experiential learning opportunities, while the team collaboration, faculty advising and expert speakers demonstrate integrative thinking, another SBA priority. Through its activities, SAIFE also strives to create a true comprehension of the world economy, strengthening and supporting the SBA’s foundation of promoting global understanding.
To learn more about SAIFE check out the Society for Applied Investing and Financial Education at OU on Facebook.
By Flori Meeks