Nevada County Picayune and Gurdon Times Newspaper Archive

Hughes Part Of Investment Team

What can seven college students find to do with $20,000?

While images of the world's largest fraternity party instantly come to mind, seven students at Southern Arkansas University in Magnolia found another way to use the money. These business students turned that sum into more than $60,000 in just four and a half years.

The project began in 1996 when the Peoples Bank of Waldo began the Student Investment Endowment with $20,000. The purpose of the gift was to not only generate funds for the School of Business at SAU, but also allow business students to gain real-world investment experience.

The Student Investment Advisory Committee was formed with students serving on this committee responsible for making investment decisions about the money. The group, with new students replacing graduates every year, has proved that the experience has helped as they have seen the original amount grow to $66,786 for a 27 percent compounded annual rate of growth.

"I thought the students needed an opportunity to use real money for investments," said Dr. David Rankin, dean of School of Business at Southern Arkansas University. Rankin, who teaches the investments course at SAU, selects the students each fall who will serve on the committee. "I pick students who have completed the investments course and who have performed well academically. I tell them what I expect from them, and then I turn them loose."

Students on the investment committee then research stocks they feel would be a good investment, and make a presentation to the other group members for approval. Once the committee decides on which stocks will be bought, the group sends its recommendations to Rankin. "If I think it's reasonable, then we make the transaction."

Scott White, a senior finance major from Camden, heads the group of business students this year. Although it may seem like a game to outside observers, White says every member on the committee feels a personal responsibility to the endowment.

"It's a real unique situation because we're dealing with real money," said White. "It's a lot different than just talking about theory in the classroom. I realized from day one that feelings changed because this was real money. Everyone takes it seriously."

The students not only feel a responsibility, they also feel a pressure to perform as well as groups in the past.

"There was pressure," White said. "We didn't want to be the first group to lose the investment curve. We wanted to do just as well if not better than the groups before us."

Seven senior finance majors make up this year's Student Investment Advisory Council at SAU. In addition to White, those students are Katie Robertson of Taylor, Tina Spells of Huttig, Jason Redden of Texarkana, Traci Hughes of Prescott, Whitney Peterson of Delight and Kathy Schroeder of Muldrow, Okla.

"I think the 27 percent annual rate of growth is an excellent return on our investments," said Rankin. "It's certainly competitive with the marketplace."

One thing is certain, the endowment has kept many business students at SAU interested in investments while providing experience they can use later in their careers.

"It's been fun," said White. "I've got an Internet site I go to where I can track the stocks each day. This project has really been interesting, and I think the experience will really benefit me."