As the stock market has experienced one of its biggest crashes since the beginning of COVID-19, students managing the Student Trading and Research (STAR) Fund have experienced firsthand the consequences of a significant crash.
The STAR fund is part of the university’s endowment and is run by students in a senior-level business class. The fund began over 30 years ago with $25,000 and officially became part of the University’s endowment in 1999. Each fall, the fund pays 2%, and each spring, it pays 2.5%.
At its highest point this semester, it was valued at $3.6 million. Within two weeks of the stock market crash on April 2, the fund went down to $2.8 million. This number continues to change. The fund swung $700,000 within four hours, said Dr. Jody Jones, faculty advisor for the STAR fund.
“This semester feels a whole lot like the spring of 2020,” said Jody Jones, associate professor in Duke’s School of Finance. “It’s really, really turbulent. We don’t know when it’s going to be over, and the market does not like uncertainty. We want things that are really predictable.”
The students in the class were at an investment conference in New York City at a conference when they received the news that the market first began to drop, said Nason Jones, the fund manager for STAR.
“We watched as the entire fund fell dramatically,” said Jones, junior finance major from Salt Lake City, Utah. “The Tariffs affected everything.”
They have to fight the urge to make big decisions that could have large impacts on the fund, but the best course of action is to stay disciplined and wait to see what the market does, Jones said.
“How the fund operates is it’s a learning opportunity and they want you to invest,” Nason Jones said, “They don’t want you to just sit and just have this big pile of a million dollars just waiting. This is a bad time for markets, but we still feel really strongly about our positions.”
In class, students continue to discuss how to move forward, but it is difficult for students to plan with the funds because no one knows what will happen next.
“I think right now we are just playing a waiting game,” said Nason Jones, “the U.S. economy, the stock market is very, very resilient. So wherever that puts us, I’m not too concerned.”
This uncertainty in the market provides students with practical learning opportunities to prepare them for the future, Dr. Jody Jones said.
“Two things they are learning are: One, God provides,” Jody Jones said, “No matter what the stock market does, God provides, and two is you need to be patient.”
