Photo: Adam Nowakowski/Unsplash
Finance, econ students have just a few days left to sign-up for annual futures trading competition
NewsUSA -- It’s that time of year again: CME Group, the world’s leading derivatives exchange, is calling on college students with an interest in finance to team up and try their hand at futures trading. Registration for its 19th annual University Trading Challenge is now open through Thursday, September 29, and there is no cost to enter.
As part of the innovative competition, teams of three to five graduate and undergraduate students from the same university are invited to learn expert techniques using a real-time, simulated trading platform provided by CQG, a leading provider of financial markets technology solutions.
Participants will trade CME Group futures and options contracts across the exchange’s main asset classes -- including interest rates, equity indices, foreign exchange, energy, agricultural products, metals and crypto.
CME Group will also provide students with educational content and market commentary, in addition to live market data and premium news articles from Dow Jones and The Hightower Report.
This year’s challenge officially kicks off on Sunday, October 2 and concludes on Friday, October 28.
"The many uncertainties in today's global economies are driving increased interest in and demand for hedging and risk management strategies," says Anita Liskey, Global Head of Brand Marketing and Communications at CME Group. "We encourage all university students who want to learn about derivatives markets and test their trading skills to participate in this unique, hands-on educational experience."
Each eligible member of the winning team will receive a $2,000 cash prize*. Additional prizes will be awarded for second through fifth place.
Student participants will also have the opportunity to attend CME Group’s Day of Market Education. This one-day forum will provide them with an exclusive look into CME Group and the derivatives industry.
CME Group is committed to educating the next generation of finance professionals on the significance of its global derivatives markets and risk management. In addition to interactive events such as the University Trading Challenge, CME Group also partners with other industry organizations to offer educational tools, such as Futures Fundamentals, a one-stop educational resource that explains the role of futures markets in everyday life. Through interactive features and rich content, the site provides risk management education for learners of all levels and helps simplify complex market topics.
To register and view details on eligibility, rules, regulations and requirements, please visit: https://www.cmegroup.com/events/university-trading-challenge/2022-trading-challenge.html.
For social media updates throughout the competition, make sure to follow #TradingChallenge2022. *Eligibility to receive competition prizes is only open to residents in the United States (US), Canada (CA) excluding Quebec, United Kingdom (UK), Germany (DE), Netherlands (NL), Switzerland (CH), Republic of Korea (KR), Taiwan (TW), and Japan (JP).
Money Matters:
Expected returns and investment experience
This is the fourth and final article Money Matters series by guest columnist Jake Pence. You can read part one What's the best way to invest in your future here, part two on the importance of Liquidity and diversification and part three covering real estate taxation here.
by Jake Pence, Guest Columnist
This is what so many people get caught up in "Expected Returns". In other words, which investment vehicle will make more money.
In reality, this is like comparing apples to oranges. The most convenient way to compare the returns is using the S&P 500 and a Vanguard Real Estate ETF and throwing them up side by side.
If I’m being honest, I think this is a lazy methodology and it is only used because of the convenience. In general, the returns will be comparable, but it will come down to the specific investment opportunity and it is lazy to make blanket statements about returns. Obviously, you need to invest in an asset that will create a return; however, there are other items to consider such as the investing experience, diversification, taxation, risk management, liquidity, and your financial goals.
Finally, something that is often overlooked in any investment is the experience of that investment.
When I say experience, I mean how is your investment going to make you feel, affect your sleep, make a societal impact, and so on. To this point, this article has been fact-driven, but the remainder of this section is 100% my personal opinion and it is absolutely biased towards real estate.
The stock market is great for people who want to put their money into a system to generate a long-term return without having to make many decisions. I worry about people who have all of their money tied up in the stock market and/or retirement accounts that are exclusively invested in the stock market (you can use them to invest in real estate too). The reason being, I don’t trust the decision makers that control these financial markets and I would rather have my money in Main Street real estate than on Wall Street.
Real estate is great for people who want to have more control over their investment, make a societal impact, and generate long-term wealth.
I love being able to create my own business plan, to meet my residents and give them a place to call home, and the proven path to create a generational financial impact. I worry about real estate investors who think that they will be able to get rich quick and think it will be easy money.
News flash … it’s a grind. There are a lot of bad actors in the industry that only care about money, and I think that is short-sighted in that this is long-term game.
In conclusion, the answer to this question should come from within and it should complement your financial goals and individual skill set.
To me, that means I should heavily invest in real estate and opportunistically invest in the stock market. To you, that could mean an entirely different investing strategy.
I encourage you to further your research on both of these topics and seek out reputable investors that have experience with both real estate and/or the stock market. When talking with other investors, make sure that you come into the conversation with an open mind, do your best to leave your biases at the door, and give yourself the chance to create a better financial future.
About the author:
• Jake Pence is the President of Blue Chip Real Estate and a consultant for Fairlawn Capital, Inc.. A 2019 graduate from the Gies College of Business at the University of Illinois, he is a 2016 graduate from St. Joseph-Ogden High School where he was a three-sport athlete for the Spartans. You can view his latest acquisitions and advice on his YouTube channel here.
Money Matters:
Why liquidity and diversification is important in your investment plan
This is part 2 in this month's Money Matters with guest columnist Jake Pence. You can read part one What's the best way to invest in your future here.
by Jake Pence, Guest Columnist
Next, picking up where we left off, we need to talk about liquidity.
To keep it simple, liquidity is how easily an asset can be bought and/or sold. Another way to think about liquidity is how easily the asset can be turned into cash. The stock market has a clear advantage in terms of liquidity, but it still warrants a discussion.
Stocks are very liquid. In fact, stocks are so liquid that last summer, I was able to sell Amazon for $1,800/share, Tesla for $250/share, and Zoom for $85/share without Robinhood tapping me on the shoulder and saying, “You might not want to do that …”
Those companies now trade for $3,300/share, $1,700/share, and $275/share, respectively, and I still live in my parent’s basement.
I don’t tell that story to downplay liquidity because having quick access to your capital is advantageous in many scenarious; however, I tell that story to highlight how liquidity makes it easy for an investor to make emotional, rash, and in my case, downright stupid decisions. At that time, I did not have the trading savvy or financial discipline to hold a stock for more than a year.
All in all, if you value having easy access to your capital and have the financial discipline to manage that liquidity, then the stock market will better suit you.
Real estate, on the other hand, is a relatively illiquid investment. Whenever you want to pull money out via a refinance or cash out of the investment via a sale, then there is going to be a process that you must follow. The process will likely take a few months. Depending on the transaction, you could fall on either side of that timeline; however, it doesn’t take seconds like it does with stocks. If you don’t need your capital in the short-term, then real estate investing will be a great option for you.
Another important criteria is asset diversification. Diversification is the act of placing your investments in a variety of asset types, industries, etc. so that your exposure to any one asset type is limited.
Diversification is extremely important in an investment portfolio because if you’re only invested in airline stocks and then a global pandemic halts all air travel … well, you’re in trouble.
It is easier to diversify your portfolio within the stock market than it is real estate. You can still diversify your real estate portfolio, but it will take more than a few hours on Yahoo Finance to do so.
To make diversification even easier for stock market investors, you could buy a mutual fund that is already diversified. In real estate, you can diversify your portfolio by purchasing different asset types (apartments, self-storage, single-family-homes, etc.) in different locations (Illinois, Indiana, Tennessee, etc.). This will take more time, capital, and energy; however, it can and should be done.
I firmly believe that a well-balanced portfolio should include both stocks and real estate.
If your entire portfolio is in stocks, then you are heavily reliant upon company executives, Wall Street, and government decision makers for your financial future. If your entire portfolio is in real estate, then the cyclical nature of real estate markets will present challenges. Overall, a combination of Wall Street and Main Street investing will create a balanced portfolio.
In my next installment I will briefly discuss taxes and how investing can potentially lower your tax annual liability.
About the author:
• Jake Pence is the President of Blue Chip Real Estate and a consultant for Fairlawn Capital, Inc.. A 2019 graduate from the Gies College of Business at the University of Illinois, he is a 2016 graduate from St. Joseph-Ogden High School where he was a three-sport athlete for the Spartans. You can view his latest acquisitions and advice on his YouTube channel here.
Money Matters: What's the best way to invest in your future?
by Jake Pence, Guest Columnist
"Real estate or the stock market - which should you invest your money in today?"
This is a fundamental question that many investors must answer at some point on their investing journey. I have consumed hours and hours of content on this exact topic and if there is one thing that I know for certain, it is this … the people creating the content are biased, myself included.
I heavily favor real estate investing over the stock market because it best compliments my goals and skill set, but I also opportunistically invest in stocks.
So … let’s weave through this complex topic and discuss five key points in an objective, fact-driven lens rather than a lens clouded with my personal agenda and bias. The key points I’ll discuss will be barriers to entry, liquidity, diversification, taxation, expected returns, and investment experience.
Barriers to Entry
A widely used economic term, a barrier to entry is a start-up cost and/or obstacle that prevents an individual from easily doing business. When it comes to real estate and the stock market, knowledge and capital will be the two most prominent barriers to entry.
I have found that the barriers to entry for real estate are often overstated because of how easy it is to buy a stock. For better or worse, the barrier to entry to the stock market is almost nonexistent.
If you have a bank account, a smart phone, and a pulse then you can create a Robinhood account and start trading stocks. Therefore, everyone has access to the stock market and can start trading.
In my opinion, that’s a pro and a con, but it does provide equal opportunities and people with small amounts of capital can start putting it to work. Before you put your capital to work, I highly recommend educating yourself on the stock market and how to make educated investment decisions.
While I have found real estate barriers to entry to be overstated, they are still more difficult to overcome than entering the stock market.
Knowledge, capital, and time are the roadblocks you must overcome to invest in real estate.
Knowledge is the easiest to overcome because books, podcasts, and the internet have all of the answers you need. I’m extremely grateful for my education at the University of Illinois, but I learned more about real estate investing from books, podcasts, and YouTube videos than I did in my 400-level real estate investing class from one of the best finance and real estate programs in the country.
Capital is the next obstacle and this one held me back for a few years, but real estate investing should be treated as a team sport. If you have the knowledge, but no capital, then partner with someone who has the capital, but limited knowledge.
If you’re wondering how a cash-poor 22 year old who lives in his parent’s basement, writes articles, and makes YouTube videos is a full-time real estate investor … it's because he partners with people who do have the capital (but limited time and/or knowledge) to invest in real estate.
The last obstacle is time and the common saying to disparage real estate investing is, "I don’t want to get called about a leaky toilet at 3AM."
Well, you’re right. That can happen. However, there are also additional ways to invest in real estate that don’t require that time commitment, such as becoming a passive investor in a real estate syndication.
Before you decide real estate investing isn’t for you, make sure you educate yourself on the different ways you can invest in real estate.
In my next article we will look at the next two key points, liquidity and diversification.
About the author:
• Jake Pence is the President of Blue Chip Real Estate and a consultant for Fairlawn Capital, Inc.. A 2019 graduate from the Gies College of Business at the University of Illinois, he is a 2016 graduate from St. Joseph-Ogden High School where he was a three-sport athlete for the Spartans. You can view his latest acquisitions and advice on his YouTube channel here.
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