Economics department reclaims $50,000 from Investment Club

Antonio Skrica and Dan Ward, co-chairs of the Investment Club. Photo by S. Siglov

Investing money is one of those things that people talk about, and say is very important, but who really knows that much about it?
Well, the Investment Club at CC does.

Dan Ward said the goal of the Investment Club is to expand the general investment knowledge of the student body.

“To do this, we offer an education portion of meetings, invite in speakers from the investment world, run a Virtual Stock Exchange contest, and manage the portfolio with the real money,” Ward, a member since his freshman year, said. He also commented that attendance and membership has been strong recently.

Unfortunately, though, the club is going to have to give up some money, which they aren’t too happy about.

However, the liquidation of funds was somewhat expected.

Five years ago, the Economics Department gave the Investment Club $50,000 -- a significant addition to the club’s then-total budget of $25,000 -- when the department believed that they had excess funds, said Aju Fenn, chair. This surplus didn’t exist, though; it was merely the byproduct of an accounting error.

After the discovery of this error, the Economics Department decided that it would rely on money from its own existing budget for as long as it could, since the supposed surplus had already been gifted to the Investment Club.

Now, the department needs the funds to help cover fees and expenses.

“We have to be team players,” Fenn said. He explained that the club will still be able to use the money they have made, and that the extra money the department gave the club was never meant to be a long-term commitment. There must be a balance when considering how funds are distributed between the club and the department, he added.
“According to the memos I’ve seen, it was understood that they might take the money back if their financial position deteriorated,” Ward said. “A separate account was set up to denote the differences in the two separate batches of money. I have got the department chair to agree to let us keep the gains-- we made about $5,000 over the period we have been managing this money- which is something that we are happy about.” Ward said that they currently still have all their money in the Investment Club accounts -- making their total funds approximately $77,000.

However, by Jan. 31, the club must give up $25,000. Then, by the end of spring break, they must part with another $25,000.

This was the idea of Jim Parker, the soon-to-be advisor for the club. Fenn said that Parker thought it would be a good learning experience for the club.

“I personally am now satisfied by their explanation for the liquidation,” Ward said. “Nevertheless, we believe that we need $50,000 for the investment accounts to provide a quality learning experience, and we are going to drop to approximately $27,000, which is something we are not happy about.”

Ward said that when the group learned that they were going to lose some money, they were clear in expressing to the department that they thought that the minimum amount of money they needed was $50,000. He also mentioned that that it seemed like the department disregarded and ignored the request, to some extent.

The current faculty advisor, Pedro de Araujo, said that the Investment Club has great potential to be valuable to students, which could be realized if there were more awareness of the club’s existence.

“The I-Club can become very important to the campus if the campus community becomes more aware of its presence,” he said. “My impression is that they can provide valuable insights into investment opportunities and could potentially act as consultants to some departments and other areas of the college.”