Since 1955, the College has been entrusting its money ó in various amounts ó to a group of Wooster students, some of whom are not economics majors and some of whom have never invested money before. Since 1955, the College has not been disappointed.
Started in the 50s with about $800 from students fined for missing then-mandatory chapel services, the Jenny Investment Club turned that $800 into a $350,000 portfolio.† In addition, in 2002, the Board of Trustees was so impressed with the club that they put them in charge of $500,000 of the Collegeís endowment.† The two portfolios are now worth about $1.3 million and growing.
ìThe club basically manages a part of the Collegeís endowment,” said Club President Willem Daniel í11. ìOur mandate is to invest that money, produce some kind of return, and use that to manage International Scholarships.”
The club is named for Hans Jenny (pronounced Yenni), a Swiss economics professor and Vice President for Business and Finance who had the idea to start the group, which was at that time called the Wooster Student Aid Club. According to Interim Vice President for Business and Finance John Sell, the clubís advisor and Board of Trustees representative, the club was a radical idea at the time.
ìIn 1955 nobody knew about any investment club, and people were pretty suspicious of investments in general unless they were bank accounts,” said Sell.
Today, the College actually employs a number of investors to manage different parts of their endowment and different categories of investments. The Jenny Investment Club serves as one of those investors, and is consistently in the top three returners in their category, according to Daniel.† Their category is one of the highest risk and therefore highest yield.
ìWe compare favorably with the professional investors,” said Sell.
The club is made up of students from all years in a variety of majors.† Though many are business and economics majors, some are in communications or psychology.† Some have lots of investment experience, others, like Daniel himself, came to the club knowing nothing about investment. Many members are international students themselves, helping to generate the money that funds their own scholarships. Sell himself has a single vote in the club and no veto power. Daniel and Sell both believe the size and diversity of the club and the student control help contribute to their success.
ìThe students really do think differently. They donít think like business and economics majors,” said Sell. ìI think it really gives us an advantage in how we think about investment, because we donít miss things.”
What else makes the Jenny Investment Club successful? Well, what they do isnít day-trading.† They aim to make the College money grow steadily over their years of existence.
ìWe are very cautious,” said Daniel. ìWe invest with a three to five year horizon.”
ìWeíre investors, not speculators,” Sell added.
The club requires a two-thirds vote to buy or sell stock, which necessitates good arguments to support any move. Because they meet once a week and no one can make executive decisions, the club makes use of something called a stop-loss order, wherein they set up their shares to sell automatically if they drop below a certain point to minimize losses.† This strategy served the club very well when the current economic recession began.
ìIn August, when things totally collapsed, we lost about 14 percent,” said Daniel, ìbut the market was down 35 percent.”
Members of the club learn a lot about investment and financial literacy, but theyíre also in it to have fun.
ìItís nice to do something educational and fun and also give back to the community,” said Daniel. ìWe just do this for fun, so itís not like itís our life savings.”