During a week in which international geopolitical tensions roiled U.S. stock markets, causing a drop of more than 3 percent for three of the four major indices, students in a special room on the Fresno State campus have watched economic developments closely.
Under the guidance of Dr. K.C. Chen, this class — one of two sections of FIN 129 — oversees the Student Managed Investment Funds, which allow students to gain real-world investment experience by managing a portion of California State University, Fresno’s Foundation endowment funds portfolio.
The fund has grown to almost $3.8 million since the late R. Stephen Heinrichs authorized the initial $1 million in seed money in 2010 and another $1 million in 2013. In May, a gift of $100,000 from Heinrichs, coupled with other endowment funds for a total of $570,000, established a second fund for students to manage.
On Thursday, Dec. 13, the Craig School of Business and the California State University, Fresno Foundation Board of Governors celebrated the memory of the man who made this possible, renaming the room the R. Stephen Heinrichs Trading Room.
Heinrichs, who died in September 2016, was a 1968 Fresno State graduate with a bachelor’s degree in accounting and a proud member of Sigma Chi. He received the Fresno State Alumni Association’s Top Dog Alumni Award for the Craig School in 2008.
Four large screens cover one wall of the Trading Room, showing various market news and graphs. A stock ticker scrolls across the top of another wall. It’s like a stock market war room on the first floor of the Peters Business Building. But real money is at stake.
“One of the huge advantages of this class” said Roman De Dios, a business major with a finance option, “is that it’s hands-on and real world. It’s not traditional — you don’t just get standard content and a syllabus. You have to be aware basically 24 hours a day what’s going on in the markets. It’s really training us to be professionals.”
Chen and students in the class discuss the week’s news — a tentative tariff truce between the U.S. and China, which arose in the recent G20 summit in Argentina, the arrest of a Chinese executive that threatens that fragile truce, interest rates, Brexit developments, offhand remarks by President Trump and more.
In managing the funds, students learn how all of these events can have dramatic impacts on how U.S. stock markets and investors react.
“I didn’t really think about global politics and how that affected everything until I started hearing from other students and learning from them, as well as researching the market. How much business done in other countries really affects the stock market,” said Emily Lackey, a student in the master’s of business administration program who is also on Fresno State’s lacrosse team.
Senior Michael Hahn said, “For me, I didn’t realize how one sentence from a leader can affect the market so much.”
The FIN 129A class is an entry point for students interested in investing and finances. Students who go on to take the FIN 129B class serve as team leaders, overseeing the various funds that the portfolio holds. Each student is responsible for staying up to speed on news and results for a small number of the 50-plus stocks the funds are invested in, and is expected to be able to report out to the class on those funds when there is breaking financial news.
In 2014, the students managing the funds earned first place out of 60 teams in an international competition for their results managing the portfolio.
Some students involved in the Student Managed Investment Fund class carry their passion for finance and investing developed in Heinrichs Trading Room into their personal lives.
Anthony Olmos, a senior finance major, traded some on his own, even before he joined the program.
“Through his [Dr. Chen’s] teachings, I learned a proper way of investing and just got better and better at it.”
Students in the FIN 129 class attended the naming ceremony.
“I’d like to thank him [Heinrichs],” Hahn said. “He did a lot for my fraternity [Sigma Chi] as well. It shows as an alumni to give back … so programs like this can continue to benefit students like me and everyone in this room. In the future, I’ll do the same and give back like he did.”