Western business students outperform Dow Jones, S&P

CULLOWHEE – Look out, Wall Street! A group of Western Carolina University business students participating in a financial investment competition sponsored by the Tennessee Valley Authority has outperformed both the Dow Jones industrial average and Standard and Poor’s 500 average.

The Western students earned better than a 27 percent return on investment for 2003, compared to a 21.45 percent return on the Dow Jones average and 22.32 percent for the S&P 500, said Grace Allen, an associate professor of finance who works with student investors participating in the annual TVA Investment Challenge.

TVA provides $400,000 to Western and 24 other colleges and universities in the Tennessee Valley region to invest in the stock market, giving students some real-world experience in financial management.

“Our students act as real money-managers,” Allen said. “And we’re not talking Monopoly money. These are real dollars they are dealing with.”

Although students do not get to keep the $400,000 or any of the return on investments, they do compete for a share of prize money for best returns.

Students spend fall semester analyzing companies, industries and the economy, working with investment professionals who provide investment support. After they select a stock portfolio, another group of students spends the spring tracking industries and trends, re-evaluating the portfolio and analyzing potential new stocks.

The TVA Investment Challenge began in 1998 as a nearly $2 million program providing $100,000 to 19 participating universities, with funding coming from a portion of the money the agency has set aside to decommission its nuclear power plants. TVA expanded the program in 2003 by adding six new schools and approximately $8 million in funds, and increasing the portfolio value for each participant to $400,000.

Western is the only N.C. institution participating in the TVA Challenge.