Abstract
AbstractThis study provides a road map for creating and operating a student-managed investment fund (SMIF) as an experiential learning opportunity in commodity market analysis. We describe the reasons for implementing a SMIF and the benefits it offers relative to traditional simulation approaches. We outline the necessary steps for starting a SMIF and explain its organizational structure. We discuss a SMIF’s operation and main activities, which include recruitment, training, trading, and interaction with the client and alumni. The implications of participating in a SMIF are reviewed within a cost-benefit framework.
Highlights
Understanding the dynamics and risks of commodity markets is an important skill for graduates in agricultural economics
We describe the organization and implementation of the commodity-focused student-managed investment fund (SMIF) operating at Virginia Tech (VT) since 2012
This article outlines the steps necessary for organizing and operating a SMIF focused on commodities
Summary
Understanding the dynamics and risks of commodity markets is an important skill for graduates in agricultural economics. Simulated portfolios are used to provide students with an opportunity to examine market dynamics, understand financial risk, and gain experience with the ins and outs of trading The use of such games can provide an experiential learning tool in the agricultural economics curriculum (Koontz et al, 1995). Paper portfolios make it difficult for students to view their investment decisions as more than an exercise (Lawrence, 1990) Another approach, the commodity trading pool, described by Tierney (1989) and Parcell and Franken (2009), has been implemented at Kansas State University and the University of Missouri. In response to multiple inquiries from colleagues at other institutions, we hope that this blueprint will allow commodity SMIF programs to be replicated on college campuses nationwide
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