Members of the Wave Pool Student Investment Club gather for a weekly meeting Jan. 23, 2020. As the economy evolves and adapts in response to the ongoing COVID-19 pandemic, the Wave Pool Student Investment Club provided a community for students to learn about personal finance and investments. Photo courtesy of Jorge Contreras
Crash. Recession. Rebound. Short Squeeze. GameStop?
Over the past year, conversations surrounding finance infiltrated everyday life as the stock market plummeted and recovered. Everyday Americans became avid investors, hoping to gain wealth in the economic aftermath of COVID-19.
Sensational stories — like Reddit users banding together to purchase shares of GameStop — brought acute awareness to the need for financial literacy, not only for understanding the tumultuous nature of the current stock market but for understanding the role finance plays every day. One Pepperdine student group, the Wave Pool Student Investment Club, works to supply that understanding, serving as a resource for students to gain financial literacy and navigate wealth management.
“Whether it’s through taxes or retirement or mortgages or paychecks, everyone’s going to deal with personal finance, but they’re not educated on the subject,” said Wave Pool President Jorge Contreras.
The Wave Pool Student Investment Club
The Wave Pool formed in fall 2017 and now exists as the sole investment club at Pepperdine, serving three main functions — to promote financial literacy in schools, to discuss investment opportunities and to develop the careers of students in finance, Contreras said.
“We understand that many students, especially in college, might struggle with money,” Contreras said. “Most students are in debt, and in a developed economy, you have to understand how finance works.”
Every Thursday night, Wave Pool meetings begin with a general discussion of current events. Using the relevant news as context, members discuss which stocks might be advantageous for investment, Contreras said.
Following the discussion, Contreras said he leads an educational portion where members learn about topics such as opening a retirement account or reading a balance sheet. In closing, members talk about internships and upcoming finance events.
“Absolutely everybody needs this,” said Haley O’Steen, associate professor of Finance and Wave Pool adviser. “If you’re going to Pepperdine, you’re most likely going to have a job where you’re going to be making more money than you need for subsistence, and you’re going to be planning for your retirement, and you’re probably going to have a 401k.”
O’Steen said the Wave Pool discusses personal finance skills, so students can address those financial life milestones with confidence in the future.
The Wave Pool shares their ocean of knowledge with students looking to get their feet wet in the world of finance, providing practical steps students can follow.
O’Steen said there are practices outside of investing all students can implement now to set themselves up for financial success in the future.
“The best thing is to make a habit of saving, and even if that’s just a small amount a month, get into the habit, just start doing it, and it will pay off in the long run,” O’Steen said.
“If you want to invest your money passively, you could put your money into something like Acorns, which is great because you don’t need to monitor it and it just grows,” Contreras said. “If you want to have more of a choice when it comes to your investments, you can go to an app like Robinhood, but I recommend if you’re going to do that, you need to be up-to-date and reading on what you’re investing in.”
Junior Nathan Tinnie also emphasized the importance of understanding the stock market before investing.
“A lot of my friends and I talk about [investing] often, and I see that as a good thing as long as we try to educate ourselves and learn how to invest doing those proper steps like researching the company, reading the financial statements, analyzing all the data,” Tinnie said.
Tinnie said he joined the Wave Pool this semester and plans to work at J.P. Morgan during summer 2021 as a Middle Market Banking Specialized Industries intern.
In 2020, Tinnie said he capitalized on the stock market’s position after the COVID-19 pandemic struck.
“Everything was literally at rock bottom and that’s when I saw the opportunity to jump in,” Tinnie said. “A lot of people say you need to be long-term investors, and as a long-term investor, it’s good to get in when the market drops so long-term it will go back up. That’s basically what I did, and it was successful.”
Long-Term Investments: Time Is Money
When investing, time is quite literally money, Contreras said.
“I 100% believe that students have to be investing right now, and when it comes to investing, time is so valuable,” Contreras said. “You cannot get a year of time back.”
Contreras makes his argument on the grounds of a financial concept called “compound interest,” that is, the exponential growth that occurs when interest generates interest.
“We can, in general, count on the stock market to consistently grow over a long period of time,” O’Steen said. “Now if you put money in today, might you lose some because the stock market is pretty volatile right now? Yes, but if you keep the perspective of, ‘I’m putting this money in the stock market today for a long, long time from now,’ I think you’re safe in that.”
Contreras said he also believes entrance into the stock market with a long-term horizon alleviates stress caused by temporary market spikes.
“People might be scared that the market is going to go down, and now we have all these COVID variants and it could be a risk, but right now when you’re young, you can take that risk because you have the time,” Contreras said.
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