Finance Students Get a Taste of Stock Market Volatility

It’s hard to replicate the feeling of investing in a real portfolio made up of real money. At the business college, the Krause Fund provides an opportunity for students to do exactly that.

It started more than two decades ago, when Bill Krause, the founder of Kum and Go, donated $100,000 to four universities, including UNI, hoping to see them compete on performance. Over the years, interest in the competition waned. But in fall 2018, Department Head Shar Self worked with faculty to revive UNI’s participation in the student-managed portfolio.

Justin Lallemand, assistant professor of finance, teaches the security analysis course, which is heavily focused on pitching stock investments for the Krause Fund. Students learn investment management tools and sharpen them through two short presentations before making a final stock pitch with recommendation at the end of the semester. At the end of the class, six stocks recommended by students are added to the portfolio.

“I think the fund is tremendously important to those students considering investments, even if it isn’t necessarily on the equities side,” Lallemand said. “What students seem to really pick up on is how messy the process can be using a realworld example.”

The recent market volatility due to COVID-19 gave students an interesting perspective on buying and selling. Since the class doesn’t invest until after the semester is over, students saw tremendous buying opportunities while the country was closed.

Lallemand said students seem to be passionate and learn realworld tools. There are even some students who check stocks long after they’ve finished the course.

“Students seem to take the task at hand much more seriously than when working on a case study, for example, as there is real money involved,” he said. “I’ve had students check the stock they selected and express their excitement when it outperforms — with under-performing stocks I get little feedback as expected!”