By KYLE ODEGARD
Gazette-Times reporter | Posted: Tuesday, September 30, 2008 12:00 am
Financial whiz kids know how to build wealth
Talk about a vote of confidence in the quality of education at Oregon State University: The OSU Foundation is entrusting a student investment club with $1 million to manage.
The funds will be presented to the Oregon State Investment Group during a banquet on Friday.
"We are really stoked out of our minds," said Adam Gulledge, 21, a senior majoring in business finance and the president of the club. "We prepared for this all last year."
However, the transfer of the funds comes at a volatile time for the stock market, where the Dow Jones industrial average dropped nearly 800 points on Monday alone.
"It's definitely some interesting times to be getting
$1 million," Gulledge said. "But we are making long-term investments. We have to see this as an opportunity. … It eventually will come up. And you know, like they say, 'Buy low, sell high.' You just have to roll with it."
The club will invest mainly in large cap equities, roughly defined as companies with a value of greater than $5 billion. "A good company lasts in the long run," Gulledge said.
The OSU Foundation, which has about $400 million in assets being managed, will hold the student group to the same standards as any of its professional investment managers.
"Our role is to support education. I can't think of a better way for students to learn about investing. Plus, they have a strong track record of returns," said Duane McDougall, chairman of the foundation's investment committee and a former CEO at Willamette Industries.
In June, the group made a presentation to the OSU Foundation's investment committee. "They were extremely diligent and had a well-thought-out process and a well-thought-out investment mode," McDougall said.
Of course, professors and alumni will help guide them, as well.
"Other foundations across the country have done this type of thing. This is not unique," McDougall said.
The student club's current portfolio is about $62,000 - fewer than three years ago, it was $50,000 - and that will stay separate from the OSU Foundation's funds.
"Last year, we produced a 23.5 percent return," Gulledge said. "We ended up beating our market by almost 20 percent."
The Oregon State Investment Group has about 13 undergraduate and graduate students; nearly all are business majors. Membership is capped at 25. Those who want to join have to submit resumes and applications and go through an interview process.
"We try and get the best of the best within the College of Business," Gulledge said.
Kyle Odegard covers Oregon State University. He can be contacted at kyle.odegard@lee.net or 758-9523.