The Hillsdale College Investment Club has seen above-average growth in its investments, growing by $22,000 over four years.
After receiving a $35,000 portion of the college’s endowment in 2016, the club experienced some early losses but quickly bounced back.
The club’s average rate of return is over 13%, which far surpasses the S&P 500’s average rate at 9.8%. The endowment is currently valued at $57,000.
“It’s been incredible ever since,” said Investment Club president and senior George Roberts. “We beat the S&P 500 last year by 648 points. There are people who are professionals at this stuff, who don’t see those types of returns.”
Unlike many investing clubs that use simulators, the group has been entrusted by the school to make real money grow.
“I can log onto the Morgan Stanley software right now and see that money sitting in the account,” Roberts said. “It’s not theoretical, like what I get in my investments class — it’s real life, this is what they do in real life.”
Because of the success it has seen so far, the club takes a lot of time to consider when, where, and how much it should invest.
“Our investable universe is hundreds of companies, and we want to find a shortlist of say 10 – 15 that we find particularly interesting — some macro-trend, or something that we think is undervalued by the market,” senior Jackson Frerichs said. “We then start looking at the shortlist very intensely — analyzing it, looking through financial statements, and coming to our own conclusions.”
If the club discovers any of those companies to be good investments that can be bought at a discount, then they will create a pitch for investing in that company to be presented to the rest of the club.
“It’s usually about a 40 – 50 minute presentation with a Q&A afterwards,” Roberts said. “And then we vote as a club, to see if we want to have that stock in our portfolio.”
Not only is the club a lot of fun for its members, it’s also educational.
“I knew only the basic investing terminology when I entered the club,” Frerichs said. “I didn’t understand any of the fundamentals. I didn’t know how to source an investment, I didn’t know how to go about analyzing one, what makes one a good investment versus another, and I learned that along the way.”
Just as professional portfolio managers do, the club makes sure that its members know every piece of necessary information before investing, both to grow the knowledge of its members, and to make sure that a quality investment is being made.
“We dive deep in Investment Club — analyzing every aspect of a company we might want to invest in,” said freshman Jason Cimponer.
Through their investment decisions, Investment Club members are learning life-long skills that they can pass on.
“I really enjoyed my experience in the investment club,” Cimponer said. “I truly believe that investing is a fundamental aspect of life, not just for myself, but also for my future kids.”
In his final of four years involved in the club, Frerichs summed up his experience, saying, “It has been without a doubt the best experience that I’ve had at Hillsdale. I’ve had a lot of great experiences, but I’ve learned the most from Investment Club.”