USS Bits and Bytes - Electronic Newsletter of the Miami University's Undergraduate Summer Scholars Program (USS)

Vol. 1, #1, August 22, 1997

Organization of a Stock Mutual Fund
Summer 1997 project of James A. Prochazka under the mentorship of Dr. David W. Marshall, Department of Finance

Photo of James Prochazka Jim Prochazka is bullish about the future of the stock market. This is reassuring for Miami University professors and administrators who plan to invest both time and money in a venture Jim helped develop this summer. As a finance minor and Dow Jones aficionado, Jim was intrigued by a project designed by professors David Marshall and Saul Adelman to create a class focused on conservative investment techniques. In order to do so, the class is modeled on similar programs at forty universities in which students create and maintain an actual stock mutual fund.

This summer, Jim spent the greater part of his time writing the manual for the class. As part of his research into similar programs, he visited Ohio State and Pennsylvania State University to meet with professors and administrators to learn their formulas for success. All of this preparation was necessary since after first year of the class, students will manage a portfolio supported by actual investments. In fact, at Ohio State the class manages part of the university's trust fund worth over a million dollars. After visiting the campuses, Jim also met with the Dean of the Richard T. Farmer School of Business Administration and Chair of the Department of Finance at Miami University for feedback on the class concept and syllabus. He also spent time this summer in search of funding for the course after its first year.

In order to create and maintain the portfolio, the class divides students into groups representing different sectors of the economy which then analyze stocks in the portfolio relevant to their sectors. There are two major reports in the class: the first one requires students to evaluate current stock and the second requires them to recommend a new stock for the portfolio. At the end of the class, a mock Board of Trustees meeting is held (including professors, distinguished business persons and in the future, alumni) during which the class presents the investment portfolio.

One of the most rewarding elements of this project was the fact that Jim and his mentor were able to meet nearly all their goals. In the beginning of the summer, Jim expected the search for funding to be one of his most difficult tasks. However, he was pleasantly surprised that many people were aware of the success of similar programs elsewhere and eager to support the same concept at Miami.

By participating in the creation of this class, Jim also received the benefits of taking the class. While he plans to graduate with an engineering major and work with his family in construction, he is very interested in developing his own stock portfolio in the future. While he admits that his appreciation for conservative investment increased with the class, he also expects to do a little speculating in the future. Bully for him.

Jim Prochazka is one of 120 Miami University undergraduates who participated in the 1997 Undergraduate Summer Scholars (USS) Program. This University program is an initiative aimed at heightening the intellectual challenge of the learning environment at Miami University. This program enables Miami undergraduates to do research or other creative activities in the summer under the supervision of faculty.

In 1997, some of the USS activities were supported by a National Science Foundation Grant to Miami University entitled "Creating a Research-Rich Curriculum: A Model for Lifelong and Continuous Learning" (DUE-9652063, Dr. J.A. Czaja, PI). This funding was provided under the NSF Division of Undergraduate Education's program on Institution-Wide Reform of Undergraduate Education in Science, Mathematics, Engineering and Technology.

Summary and Photo by Cindy (Cynthia) Bubb, a Mass Communication major with a minor in Marketing, Miami University class of 1998.