UNT’s student investment group provides education in stocks for students of all majors

Wednesday, June 20, 2007

Thinking he would eventually become a lawyer, Brad Kneedler chose a history major and a minor in business when he became a student at the University of North Texas.

His career goal changed when Kneedler attended his first meeting of UNT's Student Investment Group (SIG) in 2005, after taking an accounting class and becoming interested in investing. Now a sociology major, the Pilot Point High School graduate plans to enter a master of business administration degree program after receiving his bachelor's degree this December.

Created in 2002 from a gift of more than $285,000 in life insurance and annuities from Guy M. Cloud Jr., a retired Army colonel from Austin, SIG buys and sells stock in the open market under the supervision of faculty from UNT's Department of Finance, Insurance, Real Estate and Law. UNT joined many other universities in the United States and in Texas, including Baylor University, Southern Methodist University, Texas Christian University, the University of Houston and the University of Texas at Austin, in having an investment fund managed by students.

Kneedler is co-chairman of SIG's Portfolio Management Committee, which has students acting as junior and senior analysts. The analysts research companies for possible investments, with the senior analysts teaching the others the basics of stock selection and research and value lines during weekly meetings. All of the members vote on stock recommendations after hearing presentations by the analysts.

"You receive investment experience without spending your own money," said Kneedler, who presented an analysis of Johnson & Johnson last semester. "You have to have arguments to back up your recommendation, and you discuss your ideas with others in the group and learn from them."

Unlike many student investment funds, which only accept graduate business students as managers, SIG focuses on investment education for undergraduates and graduate students in any major, said Danielle Champagne, a master's student in business and the group's outgoing chairman of its Board of Directors. About 80 students were members during the spring 2007 semester.

"Col. Cloud wanted the group to be as open as possible to students," Champagne said. "Getting real-world investment experience is important, but that's not all we do. We see it as an educational opportunity for students."

SIG has several committees and subcommittees to involve students of all majors, including Accounting, Economics, Audit and Organizational Affairs. The largest committee is Portfolio Management. The members of this committee, Champagne said, sometimes debate for hours over a recommendation.

"We try to teach them to use research and arguments to back up their opinions," she said.

The organization also includes an Administrative Board composed of all committee chairmen and co-chairmen, and a secretary to assist the Board of Directors.

"We run the group like a business," Champagne said. "We do quarterly and annual reports to our donor, the UNT President's Office, the deans, the faculty and the Board of Regents. We also encourage students to create professional development portfolios with their presentations, stock analyses and anything else they do for SIG."

Students who aren't taking finance courses are often assigned to take minutes at committee meetings to observe and learn from other students, or do marketing and public relations in the Organizational Affairs Committee.

Anthony Bassili, SIG's new chairman for the Board of Directors, said any student who wants to learn about investments can join the group "and gain a very solid investment understanding."

"This is important regardless what you do as a career because when you start investing during retirement or before, the more knowledge you have, the more control you have over your own money. You don't have to rely entirely on a broker to make the investment decisions for you," he said.

To add to their education, the students hear guest speakers, and small groups go on one site visit per semester. This past spring, several SIG members went to Fluor Corporation in Las Colinas and listened to the director of investor relations give a presentation "as though we were investment bankers

from Wall Street," Bassili said.

Kneedler said the site visits "give us a better understanding of companies from a management standpoint."

"The visits may get students interested in working for that company in the future," he said.

As part of his donation to UNT, Cloud initiated a $250,000 matching gift campaign to raise additional funds for SIG. Once the funds reach the permanent principal amount of $1 million, scholarships for UNT students will be created from the earnings and increase in value with the account.

SIG achieved negative returns until last year, when the students decided to liquidate the life insurance policy and wired more than $195,000 to SIG's cash account, said Dr. James Conover, interim chair of the UNT Department of Finance, Insurance, Real Estate and Law, which houses SIG.

"The students analyzed a complex universal ‘B' policy before deciding to liquidate it," he said. "They've made two investments of money already - one in the fall 2006 semester and one in the spring 2007 semester, and they plan on making a third set of recommendations during the summer."

Stock selected by members of the Portfolio Management Committee for purchase include shares of CitiGroup, Exxon Mobil, Intel, Lowes Home Improvement and Proctor & Gamble. In addition to submitting recommendations on stocks to buy, the students also recommend what to sell, Conover said.

"That's something that professional investors find very hard to do," he said.

Bassili and Champagne said SIG's goals for the next academic year include adding younger students - sophomores and juniors - to the group and earning a slot for the portfolio competition at Redefining Investment Strategy Education, or RISE-VIII, the world's largest annual conference of student investment groups.

In addition, SIG is seeking donations of more funds from corporations to manage so more students can receive experience in investing, said Bassili, who plans to work in private equity after graduating.

"Being in an investment group is great to put on a resumé," he said. "Employers search for groups like SIG and actively recruit members, and some won't even consider you unless you have investment experience. The skills and leadership you learn from SIG help you push forward in your career."

UNT News Service Phone Number: (940) 565-2108