Students dabble in stock market to gain experience

“Investing in the stock market is not for the faint of heart,” said School of Management junior Erik Carlson. “It’s a risk.”

A number of BU students such as Carlson have dived into the stock market, competing with the millions of Americans who own stock.

SMG professor Ray Wilson, an executive in residence, said many students entering the stock market have looked for him to advice. Wilson called students “foolish” about their initial intentions in the stock market.

“Students very often invest in stock for it to be sold next week,” Wilson said.

Wilson said there are two different ways to invest: on a short-term horizon or a long-term horizon. Whether anybody should invest in stock has to do with his or her intentions in investment.

“The short-term horizon is like betting on a football game,” Wilson said. “There’s a lot of luck.”

While investors compete with everyone else in the market, Wilson said student investors would never know more than professional investors.

Caleb Ratinetz, a freshman in the College of General Studies, said the challenge with owning stock is actually making money. His only options have been taking what he calls smart risks and being lucky because of the unpredictability of the market.

Ratinetz said he uses a value investing strategy, in which he looks for stock under companies that supports. He started investing in stock last summer, after hearing about impending Coinbase stock potential, though he made his first investments with his father when he was 13 years old.

“There is always the risk that something will happen and I will lose the money I have invested, but at the moment my risks are fairly minimal because I have a fairly balanced portfolio and watch the markets regularly,” Ratinetz said.

Carlson’s investment strategy lasts not days or weeks, but hours. After investing for four years, Carlson looks at companies or stocks that have large momentum so that he can tell which direction the stock will take. The stocks move so quickly, however, that it becomes more volatile and riskier.

As he sees it, the stock market is currently being underestimated and has rebounded since 2009.

“Any good news is great news, though people overreact whenever they hear anything good in order to offset the negative news about the European market,” Carlson said.

Carlson recommended that students interested in investing follow current events, as the market’s performance is driven by news. For those who do not feel comfortable trading stock, students can start a mock account through banks, which trade with fake money.

“[Investing is] a great experience and way to learn,” Carlson said. “You can’t learn it from books.”

While Ratinetz did not recommend students invest in stock, he suggested other types of investments that students can make that are not as volatile as the stock market.

“Yes, I have made some money, but the larger benefits are learning how the market works and acts, which I feel will give me an upper hand to other students,” Ratinetz said.