Extracurriculars have become an integral part of the high school experience. With Pleasant Valley’s nearly 50 clubs, students are given a variety of opportunities to become involved, continue learning after the school day ends or discuss topics important to them.
But few clubs better prepare students for future success than the Wharton Investment Challenge.
The Wharton Challenge offers students interested in finance and investment a competition where they can examine investment scenarios and prepare what they believe are successful investments, all while competing against other schools. The challenge is offered by the University of Pennsylvania’s Wharton School, one of the top business colleges in the country.
Pleasant Valley is currently in its third year participating in the challenge. With over 1,300 teams in more than 50 countries, the school’s team was very successful last year, placing among the top 55 teams and being named global semifinalists.
Placing this high does not come without intensive preparation, and the team is stepping up its game to have even greater success.
The Wharton challenge requires the creation of an investment strategy that will help a given client best achieve their financial goals. To do this successfully requires researching a variety of stocks and comparing them based on a variety of metrics.
Competing teams are given $100,000 in virtual money to invest in stocks and exchange-traded funds (ETFs) into a stock market simulator. The simulator then shows how successful their strategy was.
According to Wharton, winning teams might not always have the best portfolios, but instead are judged on the strength and articulation of their team strategies.
Senior Johnny Ziegelbein has competed in the challenge for two years and believes that this year’s strategy will be a winning one. He described the first part of the two-part approach that the team is using this year. “For the quantitative analysis, we are using different metrics that analyze a company through different scopes. For example, we are looking at liquidity ratios, solvency ratios, profitability ratios, etc,” Ziegelbein explained.
“After we have chosen which metrics we want to use, we then give weights to each metric based on how important we think it is. We then use the values for those metrics to generate a quantitative score for each stock,” he continued.
Following the data-based approach, the team then takes a bigger picture look at their stocks. Ziegelbein described this second step of the process. “[Once] we’ve generated a score for every single stock, we pull out the highest performing stocks and do a qualitative analysis. In this qualitative analysis, we are looking at the current price comparison to a 52-week high/low, we are also looking at the CEO compensation stock versus salary mix, we are looking at the outlook for each stock sector as a whole and we are looking at a company’s number of shares divided by its average volume,” he articulated.
Once the team finds the right mix of quantitative and qualitative, they wait and see how their stocks perform. Additionally, they must prepare a midterm report and final paper over their investment strategy.
Although competition is a major aspect of the challenge, participating students are also receiving experience that will stretch far beyond high school and could benefit them in their career or their own finances.
In terms of personal finance, investing is a great way to build a financially stable future. As inflation climbs, people’s money loses purchasing power if it is not growing at or above the rate of inflation. Taking advantage of opportunities to invest allows people to put money away for the future and watch it grow, helping secure stability for years to come.
The skills learned through the Wharton challenge allow PV students to understand future investment opportunities and could lead to an increase in personal wealth.
Certified public accountant turned personal finance and accounting teacher Rita Brown has plenty of experience with finances and serves as the club’s advisor. She emphasized the impact that participating in the Wharton Challenge can have on a student’s future money management. “To have this kind of drive in high school where you want to understand the financial ratios and work together as a team provides a solid background for the future,” she stated.
Ziegelbein also agreed that the challenge sets him up for future financial success. “The investment challenge has helped me improve my own personal finance. I have a Roth IRA and a taxable investment account and I make my own personal investments. The stuff I’ve learned from finance club has helped me to better understand the investments that I’m making and also helped me to make safer and smarter investments,” he explained.
Not only does the challenge give students a platform to learn about investment, but it also sets those interested in finance careers above others in the very competitive field. With the advent of artificial intelligence and automation in investing processes, the need for finance professionals will continue to decline in the future.
Ziegelbein thinks that participation in the club could pay dividends both literally and figuratively in his career. “I intend to study finance in college, so the club has given me a lot of background information that will give me an edge over my peers,” he stated.
Brown believes that the challenge offers more than just investment information to students, but also intangible skills that will help them compete in a smaller job market. “In our business department, we are promoting employability skills to follow new standards issued by the state of Iowa. This type of organization (the Wharton Challenge) helps create those critical interpersonal skills,” she said.
Whether it be setting students up for financial success or preparing them for a successful career, the Wharton Challenge offers an opportunity for students interested in finance to better their futures.
No matter how PV’s team ends up finishing, the skills learned throughout the challenge will prove invaluable in the lives of its participants.
