Tag: investment

Can you tolerate risk? Or are you too risk adverse?

As you move forward in your academic and professional career, you will need to consider the contents of your asset portfolio. This will be no small task given today’s environment of rapid fluctuations and uncertainty.

Professor of Finance, Dean Johnson, offers the following insights on dealing with risky situations in the marketplace.

From Dr. Dean Johnson,

“With the uncertainty of potential default by European nations, the world-wide financial markets have shown significant volatility with markets diving and rallying on an almost daily basis. Unfortunately, the dives have outnumbered the rallies.

For the new investor, these events provide a reality check on your risk tolerance. While risky assets provide the opportunity for higher expected returns, your actual realized return can be substantially more or less. If you cannot “stomach” the losses, have panicked and sold your assets, or are losing sleep over your investments, these are signs that you cannot tolerate your portfolio’s risk level. Indeed, the higher expected return of risky assets is the expected reward for those who can tolerate market events, like the European debt crisis.”

APMP Finishes 3rd and 4th at RISE Competition

The Applied Portfolio Management Program (APMP) Gold and Black teams took 3rd in the value category and 4th in the balanced investment category at the 11th Redefining Investment Strategy Education (RISE) forum early April. The two teams traveled down to Dayton University in Ohio for the educational workshop and announcement of winners in the year-long portfolio competition.

This year RISE drew over 1,500 students, faculty and professionals from around the world to gather for insights on economic trends, market opportunities and developments in the investment world during the three-day forum.

Michigan Tech sent 11 APMP students to Ohio. Students representing Michigan Tech this year included Jacob Carlson,  Zhouli Yuan, Gengyang Pan, Jacob Vehring, Mengjiao Zhou, Wei He, Yihong Yao, Simin Chen, Annette Felton, Nathan Johnson,  and Jessica Pakonen.

From the RISE website: In the 10-year history of R.I.S.E., the forum has attracted nearly 13,000 total participants from the financial industry and colleges and universities from around the globe. Known as the largest student investment conference in the world, each year R.I.S.E. extends an invitation to business professionals to share in the first day of this two and one-half day event.  And for good reason.  The keynote panelists and speakers, who are the best and the brightest from Wall Street, corporate America, the financial media, and the international community, hold equal appeal for students, professors and practitioners alike.

About APMP

The Applied Portfolio Management Program, a course within Michigan Tech’s School of Business and Economics, manages over $1.2 million in the equity and fixed income markets. The fund is supported by donations from alumni and friends, and investment revenues support student travel and scholarships. Established in 1998, APMP has placed first at the Redefining Investment Strategy Education (RISE) forum three times since the competition began.

APMP Speaks on International Investment

Jake Calrson, interviewed on TV6 Monday, March 28, 2011.Republished from TV6 News.

HOUGHTON — Buy?  Sell?  Do nothing at all?

The stock market, at times, can seem like a bit of gamble, especially when events around the world rattle markets.  It’s certainly been an interesting few months for students participating in Michigan Tech’s Applied Portfolio Management Program (APMP).

Each year the group oversees the investment of a $1.3 million university endowment fund.  And this year they’ve seen a lot of activity in the market.

“We are down since March 11th when the earthquake happened, but we expect that to come back quickly,” says senior Jacob Carlson.  “Right now is actually one of the best opportunities to earn money.  There’s a lot of potential.”

The students say they’ve hedged their risk by holding a diversified portfolio.  They’ve got about 35 securities and are always considering new investments.  In fact, they’ve been eyeing a few Japanese companies for several months and say the disaster’s financial impact isn’t all bad.

“Japan has kind of become a pretty big opportunity for investors that are looking for something that’s slow right now and will increase in the future,” Carlson says.

Edward Jones financial adviser Bob Nelson agrees that global thinking is a great way to survive inevitable sell-offs.  He encourages his clients to stay calm, pointing out that uncertainty is sometimes worse than actual bad news.

“Be careful of what the crowds do because they’re typically wrong,” says Nelson.  “The answer is don’t guess on any one play, be diversified.”

Nelson also cautions people to pay attention to the decline of the U.S. dollar.

He says his firm recommends people invest 30 percent of their portfolio in non-U.S. holdings.

Other tips include:  talk to a friend or adviser who can be objective about your money, and consider all aspects of a company (long-term performance, dividends, etc.) before deciding to buy or sell.

APMP takes Second at RISE X in Dayton, Ohio

APMP students competed at Rise X in Dayton, Ohio with over
APMP students competed at Rise X in Dayton, Ohio against 50 teams.

Michigan Technological University’s Applied Portfolio Management Program (APMP) took runner-up honors at the University of Dayton’s Redefining Investment Strategy Education (RISE X) conference and competition recently. View photos from the competition.

Michigan Tech’s Gold Team portfolio had a 31 percent return this year and was narrowly defeated by the College of New Jersey in the value-style portfolio category. Fifty teams entered that category.

Investing proved to be challenging this year, given the state of the economy. “A lot of the schools didn’t beat the market, but we did and that was a big accomplishment,” said Ed Drouillard, a fourth-year finance major.

“I was shocked at the amount of money that schools are able to manage,” noted Eric Tangko, fourth-year finance major. “Most managed between $100,000 and $250,000, where we had over 1 million dollars to invest.”

RISE X includes student workshops geared toward learning investment strategies and the annual student-managed investment portfolio competition. Modeled after the World Economic Forum, RISE is the world’s largest student investment forum. This was the tenth year of the competition, and Tech has won the value category three of those years.

“The student-managed portfolios remain competitive in a very difficult market, which reflects the tremendous learning opportunities these students are receiving,” said David Sauer, director of the University of Dayton’s Davis Center for Portfolio Management and managing director of the RISE forum.

A Learning Experience

This year RISE X hosted twenty-three keynote panelists from companies such as Hewlett-Packard, Moody’s Investors Service, Merrill Lynch, Wells Fargo and many more.

Students attend a full day of workshops and presentations that cover popular topics in the field of investment strategy, such as alternative investments, ethics, fixed income, hedge funds, international markets, portfolio management perspectives and risk management.

“The equity research workshop demonstrated the amount of knowledge needed to analyze a specific sector,” said Amanda Vogt, a fourth-year finance major. “The presenters complete a year’s worth of research and then become experts in their individual fields and products, making it easier to identify investment strategies in that area.”

The RISE Forum enables students to talk about their own experiences in addition to hearing the experiences of the keynote panel. Students also had the opportunity to discuss their applied investment programs.

Representing the Michigan Tech School of Business and Economics at RISE X this year: Eric Tangko, Ed Drouillard, Amanda Vogt, Roy Manninen, Zeng Jie, Mindy Becker, Efrain Munoz, Kyle Thornton and David Clapp. Associate Professor Dean Johnson is the founding director of the APMP.

About APMP

The APMP manages over $1 million in the equity and fixed income markets. APMP designated donations to the Michigan Tech Fund from alumni and friends provide support for student travel and scholarships. Learn more about the Applied Portfolio Management Program.