How can you teach finance students about the intricacies of investing? Dr. Alhassan Ndekugri found an effective solution online.
Assistant Professor of Business , Allen University in Columbia, SC
DBA in International Business, MBA in Business Administration, MBA in Finance, BS in Mathematics and Business
Alhassan “Ndee” Ndekugri traveled many miles—and earned several degrees—while making his way from his native Ghana to Columbia, South Carolina, where he is currently an assistant professor at Allen University. Dr. Ndekugri says the one constant in his life has been a deep love for mathematics, which started when he was very young. Another constant: Many people, he says, find it “hard to handle numbers correctly. It’s a worldwide problem.”
This is, of course, also true of college students—even those taking numbers-based courses such as Ndekugri’s Investments Management class. Not only do they complain that mathematics is abstract, they feel the same way about finance and accounting. “They have never invested their own money,” he says. “Maybe they know a little about it from their parents, but not much.”
To help immerse his students in the real-world ups and downs of investing, Ndekugri created a portfolio-based activity, detailed below, that results in their transformation into savvy stock investors. In fact, by the semester’s end, they could probably teach their folks a thing or two.
Pieces of data are not as valuable as the whole
In a typical investments course, Ndekugri says that a teacher would have students evaluate and compare one aspect of a company—such as income statements—at a time. He believes that, before you decide whether to invest in a company, you must understand the complete financial health of that company in order to make an informed decision.
Use tech to easily research multiple aspects at once
In his Investments Management class, Ndekugri divides his students into groups, then has each group create a portfolio of the “best stocks” by looking at multiple aspects of each company’s financial health, all at the same time. Once they have made their selections, they assess the entire portfolios across the key barometers of financial health.
“This course really helps provide practical information that will help not only students who choose investing as a future career but also any students interested in investing on their own. My goal was to make lessons about financial education real to students.”— Alhassan Ndekugri, DBA
Course: FIN 366 Investments Management
Course description: Presents a broad overview of the concepts, practices, and procedures of investment management. Covers basic security types, security market operations, security analysis (both fundamental and technical), and an introduction to portfolio management.
See resources shared by Alhassan Ndekugri, DBASee materials
Teach investing with online tools that make it real
To be clear, Ndekugri’s students are not starting cold. As a prerequisite, they have taken a Financial Accounting course that covers key indicators of a company’s financial health, including general income statements, balance sheets, and cash flow statements, plus how to evaluate each. “You have to look at the company’s income statement, balance sheet, and cash flow statement,” he says. “You must compare that company’s stock to other stocks.”
That said, students have never reviewed those details for specific companies, such as Gap or Apple, so Ndekugri spends the first two weeks of class explaining the finances of large companies. This is also when he introduces the tool that will shape the rest of the course: Yahoo! Finance.
Using this site, students can click on any publicly traded company and access pertinent financial information about it. To get started, he has each student create a Yahoo! Finance account and gives them a basic tutorial on its use—and then the “real” fun begins.
Here are the steps he covers next:
Give an overview of the assignment
Ndekugri tells students that they will be engaging in a semester-long project: They will form teams to create mock investment portfolios on Yahoo! Finance (using a Yahoo! tool, not real money); they will select the stocks based on the company evaluations they complete. At the end of the semester, they will submit a report about their portfolio, its performance over the course of the semester, and what they have learned as a result.
Create the teams and pick leads
Ndekugri divides the class into the teams that students will be working in for the rest of the term. He assigns the groups randomly, since he does not want groups of friends to simply select one another. He asks each group whether anyone wants to volunteer to be the group leader. Those who do will earn extra credit, which usually motivates someone to raise their hand. If that does not work, he picks the leader himself.
Provide ground rules for portfolio selection
International companies and the international impact of businesses and stocks are a big focus for Ndekugri, so that is what he has students focus on, too. He feels this will be required knowledge for students starting to work in increasingly global markets. To ensure that portfolios are still diversified, he tells the groups they cannot include companies in only one type of industry.
Research companies and build portfolios
The professor gives the groups one week to make their choices, and each student must choose at least one company. At week’s end, groups must submit a written record of their portfolio selections that includes the reasons they chose each company’s stock. On the date stocks are chosen, Ndekugri also has students note the stock price for each company in the portfolio: This is their starting point.
For fun, Nedurgi has students name their portfolios, just as real investors do: Some choose basics like Group 2, while others get creative, combining portions of their names to create a unique, professional-sounding moniker.
Monitor portfolio performance each week
Throughout the semester, groups must monitor their portfolio and participate in class discussions to review their observations and their stocks’ performance. Ndekugri says it is essential to do this every week so that students can see how volatile stock performance can be. Part of the in-class discussion is about potential reasons for a portfolio’s performance, such as a drop in the entire stock market or a new product launch of a given company.
Request a final performance report
At the end of the term, each group makes a PowerPoint presentation covering their portfolio’s progress, from the initial stock prices to how it was performing at the end of the semester. Ndekugri has the groups present their findings in class and then submit their presentations to him for further evaluation. In addition, he has each student perform peer reviews of their group members, and he factors in both this and his own evaluation to determine the final grade.
Encourage them to share what they have learned
“The course is very important not only to the students but also to whomever they can then share what they’ve learned with—other students, their parents, and friends,” says Ndekugri. “This course really helps provide practical information that will not only help students who choose investing as a future career but also any students interested in investing on their own.”