Funding the future
Liberty’s school of business creates the SAM Fund to give students the opportunity to practice real-life investment skills while still in school
GROUP — The management team of the Student Asset Management Fund led a group of 20 students in putting together investment plans and presenting them to the faculty advisors.
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Liberty University has invested in its school of business students by providing an opportunity for them to invest.
Approximately 20 students are a part of the Student Asset Management (SAM) Fund and manage $50,000 that they invest in the stock market after careful analysis, according to Austin Smith, current president of the SAM Fund and sophomore business finance student.
Smith said the team puts together stock reports on companies, discusses their options and decides where they want to invest, before presenting their plan to their faculty advisors and finally making the actual investment.
Having a student-operated fund is a component that Michael Hart, a faculty advisor for the group and chair in the school of business, said good business schools have developed. The funds at competitive universities are millions of dollars, Hart said. Schools create these funds because they are environments where students also learn intangible skillsets, such as good decision-making and management.
“The ability for our students to make real life decisions is an extraordinary utility and progression of the finance program in our school of business,” Hart said. “It is experience you do not get simply from curriculum or from professors.”
Justin Gaver, previous president of the fund and a senior business finance student, said the opportunity simultaneously gives students a glimpse of their possible future careers and develops them for those jobs.
“Through doing this type of research they are able to grasp what a career can look like in the field and what they might be doing,” Gaver said. “They are turning interest and passion into experience and building up their resume and skills.”
Part of the experience gained is learning how to handle both success and failure. The fund has recently been performing well, as they have been beating the S&P 500 Index, an indicator that tracks 500 large organizations in the NASDAQ and NYSE that many view as a good benchmark for the stock market. To outperform the S&P is the goal of other student managed funds and professional hedge funds, but Gaver said this is harder for everyone than it seems.
Though the fund has been succeeding, Smith and Gaver both said they have made investments in the past that have lost money. Gaver said there are lessons in each mistake, and investors have to constantly be learning, adapting and withstanding discouragement.
“Playing the would’ve, could’ve, should’ve game is a very dangerous game to play,” Gaver said. “I’ve lost a lot and won a lot, and if you just let the losses eat you, you’re going to drop out of the market.”
The SAM fund has increased and decreased, occasionally due to external factors but sometimes due to student error as well. Even with mistakes occurring at times, Hart said at the end of the day it is still the students who choose how to invest.
“We give them the latitude to make decisions, and that’s how you learn, by making good investments and bad investments,” Hart said. “The result has been more experienced fund managers that have made better investment decisions.”
Finding which stocks the students believe will perform the best is not the only factor Smith and his team consider as they have also committed to not investing in any company they consider to be non-biblical, such as alcohol and tobacco companies.
In addition, Smith said being a Christian shapes the way he views the purpose of investing.
“We are constantly reminding ourselves that we are investing this money for God and not for the school of business,” Smith said. “We are trying to glorify the school of business by bringing returns to them, but we always remember this is God’s money.”
Accounting Chair Gene Sullivan said one of the things they seek to teach students is the value of money.
“Christian investors learn to be wise stewards of their finances,” Sullivan said. “This should lead to a yearning for philanthropy. Currently, all SAM proceeds from the fund are reinvested. We hope this results in more opportunities for the fund and the university in the future but it also supports a fundamental principle of wealth management.”
PRICE is a news reporter.