April 04, 2019 • By Jessie Yount
YuHeng Li, B.S. informatics ‘19, stood at the front of a small conference room, clicking through images of graph after graph depicting S&P 500 and Dow Jones Indexes over the years.
Then Li paused, motioning to a poster of the Oscar-winning documentary “Free Solo,” portraying El Capitan, the 3,000-foot granite monolith in Yosemite National Park. Rock climber Alex Honnold is perched on the wall, gazing upwards with one hand jammed into a crack. Other than his hands and feet, nothing holds him to the wall — no ropes prevent him from potentially falling to his death.
“At the end of the movie, of course, he makes it to the top (of the wall),” Li told the 10 people in the room. “But when he gets there, we all think that he will go to a bar to grab a beer and celebrate. But he does not. He goes back to his van to use a hang board and strengthen his muscles, because muscle practice is the most fundamental skill for a climber."
Li makes this comparison to convey his own investment strategy and learning approach during the second annual UCI Stock Market Competition.
As an international student with little knowledge of the American stock market, Li analyzed important market trends and crashes to determine how goods such as cryptocurrency and bonds impact the decision-making process and the overall value of the market.
Li ended up taking second place, while Julien Goavec, B.S. biomedical engineering ‘20, took first place and Nathan Lo, B.S. aerospace engineering, ‘22, took third place at this year’s competition.
An Educational Endeavor
Julie Hyunhee Lim, BA ’19, founded the Stock Market Competition in 2018. However, at the time, she didn’t have a deep understanding of investing, so she sought assistance from the Center for Investment & Wealth Management at the UCI Paul Merage School of Business.
“CIWM’s mission is first, to provide financial literacy education to the community and second, to connect the local finance industry with students. The competition fits perfectly into these two areas,” said Chris Schwarz, associate professor of finance and the faculty director of CIWM. “The competition allows students of all backgrounds to learn about investing, which is important for their financial well-being the rest of their lives.”
Students have the opportunity to learn about trading –– how to formulate trading strategies, execute trades and learn from wins and losses. In addition, the workshops teach both basic and advanced investing, information about the investment industry and how to invest when students land their first job.
Finalists are judged by a panel made up of business leaders in the community.
“Unlike other investment competitions, the competition doesn’t just focus on return on investment, but mainly on increasing students’ financial literacy,” Lim explains. "And I wanted to do so through a fun, hands-on experience.”
Goavec, who won first place, achieved the highest ROI, but he also employed a unique strategy, namely double leveraging an exchange trade fund that tracks short-term market volatility, taking into account trends over the last eight years. He also participated in all aspects of the competition, including an online “Cash Course” and all four workshops.
“Lim really hit home with all aspects of the competition,” Goavec said. “There are plenty of resources available to you, you just have to take the initiative. It was a great experience, and I know that I still have a lot to learn."
Two on-campus clubs were borne out of the Stock Market Competition, demonstrating students’ desire to teach financial literacy.
In 2018, Lim founded the Financial Literacy Association at UCI. The club hosts the Stock Market Competition in collaboration with the CIWM, while also offering workshops geared towards personal finance, such as saving and planning for retirement.
“I want to reach those who don’t know about investments or personal finance because it is absolutely necessary to one’s financial stability,” Lim adds.
Meanwhile, Praneet Sah, B.S. computer science ‘22, who took third place in last year's competition, founded the Hedge Fund Society in 2018. The club focuses specifically on investing, and offers advanced workshops on futures and options, among other topics.
In addition to these student-led clubs, the CIWM at Merage School continues to prioritize financial literacy through its LIFEvest program, which allows underprivileged youths to learn about both personal and professional finance.“As professors, we think everything we teach is important,” said Schwarz. “But if students take one thing away from the Stock Market Competition, my hope is they would remember that: If you want to retire you need to invest. If you want to invest you need to save. And the sooner the better.”