A group of Westminster College students claimed the top spot in a yearlong financial investment competition among various Western institutions.
Westminster's students were one of only three groups from 20 schools to post positive returns at the end of a volatile market year, gaining first place with a 10.87 percent earnings on their investments. They outperformed competitors, as well as the S&P 500 and the Dow Jones Industrial Average, which both reported downturns over the same period, beginning September 2007 and ending Aug. 31.
Ryan Hessenthaler, former director of Westminster's Center for Financial Analysis, called the result "even more impressive" when compared with national markets, which dealt with subprime meltdowns, credit crises, surging energy prices and geopolitical turmoil.
"If you try to force an investment philosophy, you set the team up for something to go wrong," Hessenthaler said, adding that he had little to do with the students' investment choices.
"We chose a strategy and stuck with it the whole way through," said Rebecca Javadi, a recently graduated international business student. She said the 13-member group talked about several strategies but settled on GARP (Growth At Reasonable Price).
Each stock was chosen with care, Javadi said, and after much research.
"We would sometimes become so passionate about a company we'd researched that we wouldn't want to back down on it," she said, adding that at one time, the group could have seen a 30 percent downturn had they gone with a company to which they were emotionally attached.
Research, along with very little influence and only guidance from Hessenthaler, put the group's stock portfolio at 25 percent above the market price at one point in the contest.
Local investment firm D.A. Davidson, which created the annual Student Investment Program to give senior-level business students hands-on education in investing and portfolio management, will split the profits with schools that return 5 percent or more. The program provides participating colleges and universities with $50,000 to invest in the markets over the course of the year.
"It was so interactive using real money," Javadi said, adding that the experience taught her how to develop an opinion on the changing market. "We were actually using our knowledge of the market to develop a strategy. It was as close to a real scenario that we could get given the short time frame that we had to do it in."
Eastern Washington University and Gonzaga University are the other schools reporting positive outcomes.
Other Utah schools to place in the competition all with negative returns were the University of Utah, sixth place, Brigham Young University, 13th place, and Utah State University, 15th place.
In the upcoming year, participating schools have the option to keep the previous group's stocks or reset the entire portfolio and start anew with $50,000."Paper portfolios are great," Hessenthaler said. "You can learn a lot from them. But when there's real money on the line, everything changes."