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Finance students learn ‘real-world’ skills, in the real world

Janel Shoun-Smith  | 

Students and sponsor Han-Sheng Chen at the 2019 TVA Challenge

Students and sponsor Han-Sheng Chen at the 2019 TVA Challenge

To learn stock portfolio management, finance students can’t get much more high-stakes “real-world” than actually managing a real stock portfolio.

Each year, the Tennessee Valley Authority gives students at 24 universities the opportunity to do just that, managing a stock portfolio of approximately $600,000 “real” dollars, and in spring 2020-21, a year characterized by uncertainty and quick turn-arounds, Lipscomb College of Business students performed at the very top of the pack.

Lipscomb’s team of 50 students beat out universities such as Vanderbilt, Belmont, Tennessee Tech and the University of Kentucky, outperforming the S&P 500 by 17.25 percentage points in 2020.

That performance was achieved while also having to change from in-person to online learning and temporarily losing access to The Bloomberg Terminal on campus, the same technology used by Wall Street and money centers around the world to manage investments.

“This project probably simulates ‘real world’ work for finance students as perfectly as we can in a classroom environment,” said Jeff Jewell, professor of finance, who uses the project in his equity investment and investment fund management courses. “It is developing precisely the skills that are most important in the industry.”

Students at 2019 TVA Challenge

Students at 2019 TVA Challenge

This TVA project nurtures analytical skills, decision-making, technical and presentation skills and confidence, he said. Lipscomb has participated in the TVA Investment Challenge since 2003.

“Our students are not simply buying a random assortment of stocks, they are managing the portfolio according to the Investment Policy Statement written by TVA. That process of managing to the IPS helps make our students more purposeful.”
 

“The project also develops confidence in students. We typically find that when students enter the course they are somewhat overwhelmed by the project, intimidated by the responsibility of managing a real portfolio worth several hundred thousand dollars, and very concerned about making mistakes,” said Jewell. “By the end of the second course, none of those concerns are issues. In terms of our values and virtues, the project helps make our students bolder.”

“Our participation and success in the TVA Challenge has prepared our students to enter the ever-changing and ever-challenging business world,” said Han-Sheng Chen, professor of finance, who also oversees the students in the project. “It also stimulates students interests in pursuing careers in the investment industry.”