When Facebook announced it was changing its name to Meta, David Civil’s phone blew up.
The 20-year old college student received text after text from his friends about what the metaverse is, what Meta CEO Mark Zuckerberg was thinking and if it was a good time to buy the company’s stock.
Just a few weeks later, when Elon Musk said he would decide to sell 10% of his Tesla stock or not depending on the results of a Twitter poll, Civil and his friends sat around a cafeteria table at University of California, Santa Barbara discussing whether or not Musk would follow through and if he did, what the sale would do to the stock price.
Conversations like these are pretty common for Civil. He joined two finance-related clubs in college after a personal finance class in high school piqued his interest. He was the first person in his family to invest, but school clubs have been a way to gain investing skills he may not have otherwise gotten.
“Coming from a low income family, I know how hard it is to not have a ton of money and live paycheck to paycheck,” Civil says. “Knowing I have the skills to have a stable financial life is really nice.”
College investment clubs have been around for years. Some, like the Lafayette College Investment Club — which started with $3,000 in the 1940s and now manages more than $1 million dollars — involve having students run a portion of their school’s endowment with the help of faculty advisors. These clubs give students real-world, hands-on experience with investing and a glimpse into what a career on Wall Street might look like.
But nowadays, young people want to invest their own money. Like Civil, they’re talking stocks in the cafeteria, comparing the charts on their trading apps between classes and texting each other about the ups and downs of the stock and crypto markets. Student-run portfolios aren’t going by the wayside, but the popularity of investing has students forming their own groups and trading their own money.
While there’s no hard data on just how many investing clubs have sprouted up over the last several years, the COVID-19 pandemic has certainly helped transform investing from something young people assumed was for adults into a new, obsession-worthy hobby. High school and college students were kept home from classes, sports practices and after-school clubs, so many of them turned to investing to fill their time. They scoured social media for investing tips, and put their stimulus checks to work. Trading apps and fractional shares have made it easy for even teenagers to buy stocks.
Now that they’re back in school, new investing communities on campus are keeping the knowledge flowing.
‘We’re all still learning because we’re all new investors’
Bennett Dickerson, a high school junior at University School of Nashville (USN), says he’s noticed a lot more interest in investing since 2020 — in part, he says, due to the meme stock frenzy and explosion of cryptocurrencies this year.
“People who I’d never even talked to about investing are now suddenly much more interested than they were just a year ago,” Dickerson says. “We’ll text back and forth during the school day about certain stocks that we’re looking into that are making big moves.”
In fact, the topic is hard to avoid nowadays. There are constant headlines about meme stocks like AMC surging, and cryptos that started as jokes taking off. Investors buy and sell in masses when Tesla CEO Elon Musk tweets, and then take to social media to tweet about their investment moves, and encourage others to do the same. Advice like “buy the dip” has taken on a whole new cultural meaning, with shirts, posters and even songs popping up with the phrase. And of course, TikTok has become a place to post about investing troubles and successes. Investing seems ubiquitous, both on- and offline.
“You walk into the library on a normal school day and there is almost always a conversation about a new stock to look at, how Bitcoin’s doing or what stocks are top gainers or top losers,” says Jonah Hirt, who co-founded the USN Investment Club at school with Dickerson and another friend.
The club started just before the pandemic with just the three friends spitballing stock tips amongst themselves. But thanks to the growing interest in investing, it’s grown to around 20 members.
Viraj Rao, Jonah Hirt and Bennett Dickerson, founders of the USN Investment Club. Courtesy of the USN Investment Club
The groups chats about the basics, like what a stock ticker is, as well as more complicated trends, like why meme stocks and Digital World Acquisition Corp stock — the SPAC linked to former president Donald Trump’s media venture — jump. They analyze graphs looking for patterns, like the head and shoulders pattern that analysts use to identify a reversal in trends. The students bring in guest speakers and play a virtual stock picking competition, which Hirt says has some eager members trading nonstop throughout the day.
Charlie Gorman started studying the stock market because he “didn’t have anything else to do” when his high school closed, his baseball season was cancelled and his friends were in lockdown during the pandemic.
After opening a trading account, perusing YouTube for videos on investing tips and cryptocurrency, and talking to a few friends about stocks, he created a space for him, his friends and anyone else at the school to learn more: the Highlands Investment Club at his high school in Fort Thomas, Kentucky.
The club has guest speakers and uses the SIFMA Foundation’s stock market game, which allows students to invest $100,000 of pretend money in the real-time stock market in competition against their peers.
Members chat about popular stocks like Tesla, and whether or not to buy them. They argue about which stocks are overvalued, and which ones are undervalued. They discuss which industries are going to expand the most that year; some kids like to invest in oil companies, others like technology companies, Gorman says.
Students who were isolated at home, picking up investing tips from the internet and their parents, now have their own communities where they can compare notes with people their own age.
“We’re all still learning because we’re all new investors,” Hirt says. “Bouncing off of each other’s stock knowledge is really helpful.”
And these students aren’t just betting all their money on risky investments. Viraj Rao — the third co-founder of the USN Investment Club with Dickerson and Hirt — says events like the GameStop frenzy are exciting but when he does engage in short-term trading, he tries to do it as responsibly as possible.
“When all the GameStop stuff was happening, I tried to do a small flip,” Rao says, referring to buying an asset with the intention of quickly selling it to make a profit. “But I only used 5% of my portfolio and had an exit strategy.”
He wants his investments to set him up for success for years to come, not just to gain a quick buck tomorrow.
Building community and preparing for the future
These clubs are also transforming investing from something that was seen as just for wealthy men up in skyscrapers on Wall Street. On campuses, students from communities that have traditionally been on the outskirts of the finance world are gaining exposure and skills.
A Highlands Investment Club meeting led by Charlie Gorman. Courtesy of Charlie Gorman
Nicole Castelblanco knew she wanted to be a part of the Bentley University Investment Group (BIG) before she stepped foot on campus, and messaged the group on Instagram before even picking classes.
Since then, the club has exceeded her expectations. Castelblanco, 20, had no knowledge of investment management when she joined the group, and was intimidated by being one of the few women. But just a few years later, the Bentley junior from South Riding, Virginia, has served as secretary and is currently serving as president of the executive board. She’s also helped form a women’s network within the club to help others feel as comfortable as she’s grown to feel.
“It’s cultivating confidence in these women,” Castelblanco says. And the confidence she’s gained managing money for her school has pushed Castelblanco to invest some of her own money as well.
BIG — one of the clubs where students are investing their school’s actual money — may not be new but it’s an example of how the investing space has opened up to students who may not have seen it as a possibility just a few years ago. In 2019, just 21.9% of senior leadership roles within financial services firms were held by women, according to data from the nonprofit Catalyst. Morningstar found that as of the end of 2020, female-only fund management teams make up just 2% of funds in the U.S.
Since the finance and investing industries are so male-dominated, it’s been really important to Castelblanco to have a space on campus where women interested in pursuing jobs in the field can support one another.
“You can go in with any amount of knowledge and come out confident in [your] ability to make investment decisions,” she says.