By James Joseph Smith ‘19
The Merrimack Investment Club launched its third annual Merrimack Madness Trading Simulation on Feb. 12. The stock market simulation mimics actual capital markets, and students compete using their investing knowledge. The competition runs through April 27 in the Mucci Capital Markets Lab in Crowe Hall, and a celebration event will be held on May 3.
The goal is to invest $1 million mock dollars in different companies to see who can earn the biggest return. Students can choose to participate either individually or in groups of two or three. “Students utilize different kinds of strategies from purchasing stock, shorting stock, and even buying options,” explains Pat Nevins, a senior at Merrimack who lead for much of last year’s competition.
Depending on their major or area of study, students compete in one of three divisions, Non-Business, Business, and Finance. Last year student winners in the Non-Business Division came from Mechanical Engineering, Civil Engineering, and Human Development. Mary Papazian, a finance professor at Merrimack College, explained, “We started the contest to build community within the business school where everyone had something in common to talk about. We also wanted to get non-business majors involved because we want everyone to be able to utilize the Mucci Capital lab we are so lucky to have on campus.”
Peter Pantelis, a senior leading this year’s competition, echos a similar sentiment, “What we hope students get out of this is more interest in the markets and different types of investments as well as a way to enjoy the world of finance if they are another major.”
The first place contestant will receive $750 as well as $250 to be donated to the local charity of their choice. Second place will receive $500, and third place will receive $250. Winning students will give short presentations on how they achieve their investment returns. Previous winners presented on achieving returns during such a brief time by using options and actively-traded securities to gain profits from market volatility.
Students participating in the Merrimack Madness Trading Simulation demonstrate a lot of knowledge about investments and the stock market, but this is not typical of most college students. It’s also not typical of most Americans, considering the fact that less than 50 percent of individuals invest in stocks. Results from a 2015 Bankrate survey show that less than one in three Millennials invest in the stock market. Around half of the survey respondents say they cannot afford to invest, and nearly a quarter say that not knowing how to invest are major barriers.
Andrew Klim, a junior at Merrimack, says he’s not currently investing in the stock market because he does not have the funds to do so, adding, “People don’t really try to find information about the stock market until they’re out of college and settled, or until they’re either working on or most of the way done with paying student loans.”
Ryan Salvaggio, a sophomore at Merrimack, identities a lack of knowledge about the stock market as the main reason he is not currently investing, saying, “I don’t know a lot about it, and I don’t really have a desire to figure it out right now.”
Other students say they do invest, and that investing early can help mitigate risk and loss. “I have very little to lose at this stage in my life. On a personal level I don’t have debt so even if I lose money I just start at zero so I don’t see any reason not to invest in the stock market,” said senior Kenny Clarke.
This year’s Merrimack Madness Trading Simulation will likely be very competitive, just as the real world of investing is known for its aggressive, and at times, cutthroat landscape. Merrimack students are about to find out if they can run with the bulls.