Investing in Their Futures

Student Investment FundSome kids inherit favorite sports teams from their parents by cheering them on together on game days. Others inherit a passion for style by dressing up in clothing selected from their parents’ closets. One passion that’s typically more difficult to inspire, however, is a fascination with economics. Yet, Maddie Ripley ’14’s (above, left) father achieved just that.

Ripley became interested in the stock market as a child when she and her father would track companies together in the newspaper. Rather than look at IBM or AT&T, they would follow companies Ripley could relate to, like McDonald’s and Mattel.

“It was fun to see the changes and how the company was doing, but I didn’t understand why that was happening or the thought behind investing,” Ripley said. “I wanted to know how to do that.”

The Student Investment Fund (SIF) gave Ripley the opportunity to understand. One of 15 members, she is now the fund’s vice president. The SIF was started in the 1970s by a $50,000 donation from the late Mary Wig Johnson ’35. It now has a portfolio of more than $200,000 invested in more than 20 companies. The money is completely managed by students who are accountable to the board of trustees, with no faculty or staff advisers.

“We’re really focused on learning and education,” SIF President Julia Ogburn ’13 said. “We look at how to analyze each stock so it’s relevant to personal investing. It’s not something corporate. It’s something you can apply to yourself.”

The focus on education extends to the broader Scripps community. Each year, SIF hosts an open meeting to educate others about the basics of investing. SIF also distributes four to six percent of their fund annually to Scripps and 5C clubs and organizations.

During Ogburn’s four years on campus, the presence of SIF on campus has increased, evident in the number of applications the fund receives for membership. With its bylaws capping membership at 15, the fund has gone from accepting about 75% of applicants to now only a third.

Nonetheless, both Ogburn and Ripley agree that most students are not aware of the benefits of investing so young.

“College is a weird time because we’re learning how to be independent, but I don’t know if students seek out information to be financially independent,” Ripley said.

“I think people are intimidated by investing and don’t think that they have the time or money to actually partake,” Ogburn said. The key, she adds, is do your research.

“You just have to be level-headed,” Ripley said. “Of course you’re going to make mistakes, but it’s not as overwhelming or complicated as some people think.”

The club divides up the research, with each member responsible for tracking one or two companies in which SIF holds stock. Members can also pitch for new stocks to invest in, and has recently focused on diversification both in terms of the sectors they invest in and variety in how many stocks, bonds, and mutual funds they hold.

“You don’t want to have all of your eggs in one basket,” Ogburn said. “Things like tech are really big right now, but that hasn’t always been the case and may not always be the case. There are other sectors, like utilities, with consistent profit.”

Ripley views the diversity of the club as valuable as the diversity of its portfolio. With a wide range of ages, past experiences, and majors, members bring a variety of knowledge to the group. One peer knows about the biomedical field, for instance, and talking with her has made Ripley more comfortable considering investments in that sector.

Ogburn invests her own money as well. Her experience on SIF has made her more confident sifting through potential investments. In examining Facebook’s stock fall, for instance, Ogburn noted that despite the company’s power, they don’t have a physical product.

“The public questions the future of Facebook,” Ogburn said. “If they had IPO’d five years ago, they would have gained a lot instead of losing a lot. They had more potential reach. Now their potential reach is to developing countries, but only if they have Internet or computers or smart phones, so their reach is dependent on other companies’ reaches.”

“I tell my dad what I pitch, and he looks them up and says what he thinks,” Ripley said. “It’s funny that my involvement in looking at financial markets has advanced past his.”

 

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