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AS STOCK MARKET VALUE DROPS,
WOULD-BE WALL STREET WIZARDS WORRY
ABOUT STUDENT INVESTMENT PORTFOLIO
EDITORS: In response to recent volatility in financial markets, we thought you would be interested in a unique perspective: IU students who manage a student investment fund valued at about $450,000. Contact information is provided below, but should you need further assistance in reaching our faculty or students, call George Vlahakis, IU Office of Communications and Marketing, at 812-855-3911 or e-mail him at gvlahaki@indiana.edu
BLOOMINGTON, Ind. -- Students in charge of managing investment funds at Indiana University's Kelley School of Business are learning that all bets are off when the market nose-dives. But their professor says a market meltdown provides perfect seasoning for future careers on Wall Street.
Second-year MBA students enrolled in the Kelley School's Investment Management Academy are managing a stock portfolio that's been in a prolonged tailspin over the past few weeks. As recently as July 17, its value was up by 22 percent for the year. But after last week's declines, as of Aug. 31 it was down 10 percent.
That's a far cry from years past, when the value of the 12-year-old Reese fund trudged steadily upward, from $100,000 when it was originally endowed in 1986, to about $450,000 today. Students sold some stocks over the summer, which means the fund now has about $100,000 in cash. Students will be meeting this week to decide whether to buy, sell or hold.
"You really have to go back to 1987 to have experienced anything like this year," said Robert C. Klemkosky, IU professor of finance. "The market in '95, '96, '97 and half of '98 was nothing but up, and everyone thinks they're a genius. When something like this happens, it's pretty humbling."
For more information on the Reese Fund and students involved in the Investment Management Academy, contact Klemkosky at 812-855-3422.