Students pooling cash to invest in their futures

University students anxious about their pensions or hoping to find well-paid jobs are increasingly pooling their money and forming investment clubs to buy and sell shares.

The entrepreneurial students hope to learn about how the economy works and gain expertise in asset management through investing in stocks.

However, some analysts fear that students who get absorbed in these investment undertakings might end up gaining an interest in money for the wrong reasons.

Every Friday evening, on Keio University's Hiyoshi Campus in Kohoku Ward, Yokohama, students carrying magazines with information on stocks attend a meeting of SPEC (Keio Stock Club).

The club, established in 2004, is made up of 35 first-, second- and third-year students, about 30 percent of whom have trading experience.

In the meetings, senior members teach the fundamentals of stock trading such as terminology and how to read financial statements.

Thirty of the members paid 10,000 yen each to form a trial fund that was established in April. In the meetings they discuss which stocks to buy.

"There's a degree of guilt associated with stock trading, but it's an excellent way to learn about economics," said Hideki Sekito, 20, a representative of the club and a student in the university's science and technology department.

A group of about 10 students at Doshisha University, all novices in stock trading, are hoping to set up a club there this summer.

"Our generation is worried about the future because of pension concerns and other issues," a member of the group said. "So we thought we'd better start learning about asset management now."

Agents is a well-known investment club for Tokyo University students. Its members wrote and published a simple stock-trading textbook in 2004 that sold more than 130,000 copies.

Fifteen universities, including the Tokyo University of Foreign Studies, Meiji University and Osaka City University, are known to have investment clubs, with most club members investing about 10,000 yen each.

Investment clubs were first recognized in Japan in 1996 and are considered to be associations under the Civil Code. Most of them have established accounts with securities companies.

The number of clubs has increased by about 30 percent over the past two years, bringing the level to about 500 clubs, according to nonprofit organization Aprosis.

These university clubs are said to be beneficial in helping find employment for students interested in learning how to assess matters such as management strategies, areas of potential growth and acquisition targets.

Aside from the educational aspects of these clubs, some students expect they can profit if their investments perform well.

However, Takuro Morinaga, a professor of labor economics at Dokkyo University's economics department and author of several economic best sellers, warns against this. "One false step, and you could turn into a money-worshipper and make some foolish moves," he said.

"It's not about making a profit or a loss. It's about learning why you invested in a certain company's stocks," said Chiaki Wakazono, head researcher at the Japan Securities Research Institute.
(Jul. 12, 2007)
http://www.yomiuri.co.jp/dy/national/20070712TDY04005.htm