MSU Students Leading Other Universities in the D.A. Davidson Investment Class in Net Gains

Every year, some Montana State University (MSU) College of Business (CoB) students participate in BFIN 409 “Intro to Applied Investing,” a semester long course started by D.A. Davidson, which allows them to invest in real-life. The Student Investment Program was first created by Ian Davidson at MSU, 25 years ago.

The program provides teams of students at participating schools with $50,000 each to invest over the year. The school teams get a chance to share in any profits, and D.A. Davidson absorbs any losses. Each team makes investment decisions alongside a local D.A. Davidson financial consultant, who acts as a team adviser.

The work of students at the 20 schools, over 25 years, has collectively resulted in a net gain of $310,000, Ian Davidson told the fall 2010 Orser Executive Speakers Forum audience. An incentive program was started 10 years after the program began, where profits were shared with the students’ schools. Since then, more than $375,000 has been paid to the 20 schools, including $19,900 paid to the CoB.

November 30, 2011 marked the end of the first school-year quarter that began on September 1. So far this year, the aggregate performance of all program participants is a year-to-date decline in value of 1.53%. For the same three-month period, the major U.S. equity indexes experienced gains of between 1.58% (NASDAQ) to 3.72% (Dow). November was a particularly difficult month for the program’s portfolios, with 15 out of 20 experiencing value declines from the previous month. It’s clear that the students in the program are acquiring an up-close look at how global economic uncertainty and market volatility can impact investor confidence and investment performance.

The CoB students, after one quarter, were able to exceed expectations and currently lead the pack of 20 different universities including Eastern Washington State University, Washington State University (WSU), Gonzaga University, Boise State University, University of Montana, University of Utah and others.

The students have achieved an impressive 4.92% gain, handily beating the Dow. WSU is the only other school who also outperformed the Dow, and only seven schools are showing net value gains.

Of course, one quarter does not make an investor or investment, but we are pleased with the current results and applaud the hard work our CoB students have put forth in this course.

For more information, please contact Ron Matelich at 406-587-5461 or rmatelich@dadco.com.