In spite of, or perhaps due to the recent economic turmoil, the Undergraduate Stock Trading Society at UCLA has seen a definite increase in their membership.
Founded last year by third-year economics students Carl Abuan and Kenny Lee, the group’s initial focus was to interest students in investing money in the stock market. However, last week’s losses were far from encouraging to stock market newcomers.
The Dow Jones Industrial Average lost 18.2 percent last week, the largest loss in the index’s history.
“It’s not a good time to invest in the market,” Lee said. “But what better time than now to educate people on responsible stock trading?”
Lee, who has been trading for about nine years, said that the losses sustained by the market last week were “the worst since the Great Depression.”
“I was not expecting it to be as steep a decline as it was,” Lee said.
Though Lee personally lost a large amount of money, he said it was not the greatest loss he has sustained; the dot-com bubble crash hurt his finances more, despite the fallout being limited to only that sector of the market.
Lee has decided to ride the market out, expressing his wish to put even more money in if he has a chance to do so. Lee said, savings accounts currently offer such a low interest rate that the higher potential of return in the stock market is worth the higher risk of losing money.
Other members of the group were luckier; Abuan had cashed out his earnings earlier this year and had no money in the stock market when it plummeted. Kuangyi Chen, a second-year electrical engineering student, said his investments were mostly unaffected by the market’s losses.
“At the moment I’m staying put on those stocks ““ I’m playing conservative,” Chen said.
Second-year computer science and engineering student Kanak Biscuitwala had originally joined the group to learn about the market and even had plans to invest earlier this year. He said he had planned to be more “aggressive” financially, but was eventually deterred by the market’s downturn.
The trading society meets once a week in seminar style. More experienced members offer advice and lead discussions on current financial topics, such as the government’s bailout plan to pour $250 billion into the nation’s banks.
Abuan said he was not expecting the amount of interest the student body had in learning about the stock market.
“I was surprised that there are students who took the initiative to get together and discuss the market,” Abuan said.
As the market makes its rebound, Abuan recommends that students buy stocks on their way up, but not to buy everything at once. However, he stressed that the purpose of the society isn’t to make students instantly rich.
“I can’t guarantee that we’ll make you money,” Abuan said. “There’s no such thing as guaranteed success.”