Capital Idea: ESD Students Invest In Stock Market
Matthew Dross hopes to become an investment banker after college. Math and numbers come easily to him; he’s already excelled in several AP classes, including calculus, physics, and microeconomics, and plans to add macroeconomics to his resume before May’s graduation.
Outside of class, Dross is a member of ESD’s Student-Managed Investment Fund club. The group, which meets weekly with ESD chief financial officer Robert Buchholz and several parent volunteers, works together to manage and monitor a portion of the school’s cash reserves the club had invested in the stock market.
Last year, ESD’s board of directors set aside $50,000 specifically for the SMIF; the current portfolio is valued at a little under $52,000. The idea is that students who are involved in ESD’s investment group can gain a competitive edge when it comes to college admission processes.
“These students have been presented with a very interesting challenge to help the school provide for its long-term needs by making prudent investment decisions with real money,” Buchholz said. “In our parent community, we are very fortunate to have experienced professionals in all aspects of investing and capital markets who are willing to volunteer their time to help the students learn how to be careful investors.”
In addition to being given the opportunity to manage a real portfolio, the students are also tasked with following specific sectors and presenting to their peers what they have learned about industry and market trends.
“I think the greatest skill I have gained from being a member of the club is being able to collaborate with other students effectively,” said Dross, a senior. “So much of business today is based on networking with other people, so the opportunity to learn how to form and grow these kinds of relationships is invaluable.”
A typical meeting involves Buchholz, or one of the volunteer advisors, offering students with a variety of stock options to consider purchasing and leading discussions about the company’s potential value and future earnings.
“I joined the club so I could learn how to interpret a balance sheet for different companies and understand what the different numbers and columns mean,” said ESD junior Daniel Westra. “I want to study economics or finance in college and then work on Wall Street, so I thought this would be a good starting point and keep me informed about what’s happening in the industry and what skills I will need to know to work for a private equity company.”
For Dross, who has managed his own brokerage account for nearly five years, being part of SMIF has reinforced his plans for college and beyond.
“I’ve always wanted to study business in college; now I’ve narrowed in on either finance or accounting, as well as economics and business management,” Dross said. “After college, I hope to pursue a career in investment banking or private equity.”
— Staff report