Abstract:

This article explains how a capital markets forum, named “Investment Club” (or “Club de Bolsa”), was created by two professors of EDEM Business School in Valencia (Spain). Both professors are faculty members across graduate and undergraduate programmes of the institution. One full-time (the lead author of the current work) and another who is employed as an associate professor, complementing his own professional activities as the Chief Financial Officer (CFO) at a successful local family office. The origin of the idea arose from a repeatedly detected need exposed by several students who exhibited a strong interest in financial markets, however perceived themselves to be lacking sufficient knowledge, both practical and theoretical, in the specific area of financial markets. Moreover, this initial subjective perception was later objectively confirmed through the deployment of different surveys. Therefore, the professors’ response was to create an “Investment Club”, as an extracurricular and optional activity delivered through one-hour sessions on a quarterly basis. During this innovative initiative both professors formally presented the current standing and functioning of the financial markets, described and scrutinised relevant facts and information present in the financial media, and critiqued the actions developed by specific firms, all of which through a holistic lens. In other words, through using tools from different fields such as financial mathematics, financial accounting, corporate finance, business strategy, macroeconomics, and international business a more complete and robust picture was able to be provided for the students. Thus, with this transdisciplinary approach, the students were also able to better understand the different connections amongst subjects within their relevant degrees.

To be more specific, the general structure of every session of the “Investment Club” consists of, firstly, implementing an introductory summary of what has happened in four relevant indexes along the period analysed (Ibex 35, Euro Stoxx 50, Dow Jones and Nasdaq Composite). Secondly, a review is then developed surrounding the most pressing news-related issues in the markets. Third, students are shown how to calculate the fundamental value of a company (for example, Apple) as well as analysing its evolution in terms of profit and growth during a specified period. Fourth, the professors provide a brief summary of the session and a succinct list of key ideas and advice for future investments. Finally, the whole session is ended with a “Questions and Answers” section where students get to share any doubts or concerns, they may have.

The appeal of an “Investment Club” for the students lies in its proximity to the financial world. Contents are brought to life and evolve as the market changes. In this way, students from whichever course can attend any session due to the relevancy of the “syllabus” and its alignment with the new and prevailing market frame. The “Investment Club” also serves to elevate the financial literacy among students, given that literature shows that those citizens with strong financial skills plan and diversify better their savings and retirement (Lusardi and Mitchell, 2014). Likewise, after each session a survey is sent to the students, so it is possible to provide some insight into their investment habits and their financial knowledge, and most importantly, how they can (and do) improve it.

Keywords:

Investment club, capital markets, financial analysis, teaching methods.