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Volatile stock market is learning opportunity for Xavier University finance students

Posted at 4:30 AM, Feb 07, 2018

CINCINNATI -- This week got off to a rocky start on Wall Street, but Xavier University is using the volatility as a teachable moment for its finance students. 

The Dow dropped 1,175 points Monday, the largest single-day point drop ever. Stocks rebounded somewhat Tuesday, and the Dow finished up 567 points, the biggest point gain since August 2015. 

For the Xavier students, it's an example of when to buy and sell. Associate Professor David Hyland is director of the student-managed D'Artagnan Capital Fund.

"These are really good learning experiences for students at this time, or really anybody," he said. 

The students manage about $3 million of the university's endowment in large stocks, according to Hyland.

"A lot of the students definitely experienced some of their first real pangs of some of the stocks they bought had fallen significantly," he said. 

Despite the drop, Hyland said stocks are still a better return than other low-risk investments. Historically, the value is in the risk, he said. 

"You're rewarded for baring risk," he said. "So, when the markets go down, that's when the risk is happening. That's the time not to panic."

The volatility in the market could be a reality check for some students. It could also be an opportunity to buy. 

"Try to maybe make some trades to try to take advantage of some of those situations," Hyland said. 

For anyone without the stomach for market corrections, Hyland said to diversify with other investments. 

"If you can't sleep at night, it's not the right portfolio for me," he said. "It's too risky."