Clicking for cash

Students trade stock on Websites

By Dan Krauth

Daily Staff Reporter

The traditional image of college students working to make ends meet by returning empty soda cans for change or holding a job in a residence hall cafeteria may have faded with the past century.

Many University students are switching from after-school jobs to online investing and earning thousands of dollars.

"It's exciting to see how a few clicks of the mouse and typing a few numbers can make you money," LSA freshman Adam Zweibel said.

Numerous students like Zweibel research investments online on Websites such as charlesschwab.com, etrade.com and ameritrade.com. These Websites have tips and charts on the latest investments in stocks, options, bonds and mutual funds.

"When I get a tip on something that looks hot, I act on it and I check my portfolio under my.yahoo.com," Zweibel said.

Zweibel started investing online at the beginning of the academic year with $1,500. Now, five months later, Zweibel boasts more than $8,300 in his portfolio.

LSA freshman Anthony Chubb has also clicked his way to successful earnings.

Although Chubb initially invested $2,000 last May, Chubb's earnings now total $45,000.

Chubb said he spends about an hour per day checking his investments. Chubb said one secret of his success is that he buys many penny stocks using Ameritrade, an online investing site, and then researches them on other sites and by watching news sources such as CNBC.

The increase of student investing prompted LSA senior John Yen and two other students to begin the Michigan Interactive Investments Club in the fall of 1998.

Through MII, which is a non-profit student-run investing organization, more than 50 students meet weekly to focus on learning how to research stocks.

"We teach people the business and the jargon," said MII President Yen, a former Merrill Lynch intern.

While the group teaches technique that can be used for individual investing, the group also invests collectively.

"We all have one portfolio and buy as a group. All of the returns that we get go back to the organization," Yen said.

Yen said first-time investors can benefit by using online resources.

"If you want to get involved with stocks, go with the online investing but with a low amount of capital - until you're experienced - that's how I started," he said.

LSA sophomore Josh Warsaw said MII has taught him to "evaluate stocks better, how to understand the numbers and

DAVID ROCHKIND/Daily

LSA sophomore Josh Warsaw, a member of the Michigan Interactive Investments Club, checks stocks online in the Angell Hall Computing Site last night. good fundamentals of investing."

Warsaw invests on dljdirect.com. Warsaw uses the Website because it offers options such as extended market trading, which allows investors to buy selected stocks an hour before or after the market opens and closes.

Warsaw said he has learned through MII to look into investing techniques "most beginners don't know about," such as using limit orders and stop-sell options.

Most Websites for investing are easy to access and join with an online application. On etrade.com, information including place of employment and address must be entered. When applicants are finished, they print it out, sign an account agreement statement and send it in with a check for at least $1,000 to begin investing.

Chubb said he started investing by using money that his father gave him to learn about the stock market.

"He said that if I lost the money then it would teach me that the stock market is an easy way to lose money," Chubb said.

In order to help students minimize losses, Yen said, MII focuses on how to decipher the confusing information found on Websites such as charts and future estimates.

"The downfall of online investing is the amount of information involved for the college student. In some ways it hurts them because they can't utilize the information," Yen said.

Warsaw said he is so cautious about investing he puts a stop-sell option on his stocks "so that I don't lose."

This way, if a stock decreases to the price that he sets, the computer is programmed to automatically sell that stock.

"One hundred percent of my money is in the market. In this market it's hard to lose - as long as you do your research," Warsaw said.

Despite all of the students involved with online investments, some still prefer using a stock broker.

"Most online trading sites use prices that are slightly higher and aren't as competitive. When you have an experienced broker, it is easier to get a more competitive price," LSA freshman Rochan Raichur said.

Chubb said he had a traditional stock broker before investing online but found the fee to be too steep. "I went through Prudential and it was anywhere from $50 to $300 a trade and now it's only $8," he said.

Yen said online investing companies are able to charge such low prices because they are saving money on customer service.

"It's a lot cheaper if you have high volume and low costs because companies such as E-trade can charge low commissions," he said.