Isabella Loza-Ortiz, who had a job at Unum waiting for her when she graduated, says working with the SMILE Fund “changed my career"
Dillon Martin was in New York, meeting and greeting “big-time” movers and shakers in the world of finance. There were people from Barclay’s, from the New York Stock Exchange, from TD Ameritrade.
It was somewhat daunting to talk shop with titans of the financial industry, he admits, but he also came away with something valuable:
“I knew that there wasn’t magic to it.”
“We know the same things they know,” says Mr. Martin ’16, who now works full-time at Merrill Lynch in Chattanooga. “We can understand it just as well as anybody else. It instilled a whole lot of confidence and it took away a whole lot of anxiety. Once you take away that worry, it levels out the playing field.”
While classroom lessons are essential, he says, much of his ability to navigate the nerve-wracking world of investments without going gray can be traced to a program he was involved in while a finance student at UTC: the SMILE Fund.
Created in 2015 with a $250,000 endowment from the UC Foundation, the fund—SMILE stands for Student Managed Investment Learning Experience—allows students to invest in the stock market. Real money. Real wins and losses. Real world. No Monopoly money here.
Essentially, they are financial advisors with the UC Foundation as their client. They must research various stocks, make the carefully-considered but ultimately gut-level judgments on which ones to buy and which to sell, when to buy and when to sell.
“We have a saying, ‘It’s better to be wrong for the right reasons than to be right for the wrong reasons,” says Dr. Hunter Holzhauer, UC Foundation assistant professor of finance and faculty advisor to SMILE.
Although final decisions are OK’d by higher-ups, students who’ve been part of SMILE say it’s a rare moment when they’re overruled.
“You gain experience that you just can’t get in a classroom at all,” says Hunter Carroll, current president of the fund. “You hear it in class and you know that it’s important, but it gives you the experience to see what you’re learning in class applies to the real world.”
In conversation, SMILE students use terms like “financial modeling,” “quantitative and qualitative research,” “derivatives,” “equities,” “algorithms” and “commodities”—and actually know what they mean. They come off so knowledgeable and self-assured, you’re tempted to reach into your pocket, pull out whatever money you have there and give it to them, saying “Invest this for me.”
“I don’t want this to sound braggy,” Mr. Carroll says, “but I think that being in the SMILE Fund, especially if you take it seriously … I think you really do leave college with the mindset of a late 20-year-old in the investment world.”
Instantly Employed
For many SMILE students, jobs are waiting for them before they even graduate. Mr. Martin’s job as a financial advisor at Merrill Lynch was waiting for him; Isabella Loza-Ortiz ’16 had her name on an investment analyst position at Unum before she picked up her diploma. Carroll, who graduates in May, doesn’t have a fulltime job yet, but he’s hardly worried.
“I have countless business cards in my apartment from people I’ve met through the SMILE Fund. One of my drawers at home is dedicated to throwing business cards in,” he says.
At this point, the fund has about $285,000, according to Dr. Holzhauer. While the fund has had its dips, it has spent almost all of its two years on the positive side of the ledger, he says. SMILE uses the S&P 500 as its benchmark, trying to maintain its growth—or losses—at the same level as the index and overall it’s growth rate has been better.
“At eight months into this year, we’re about 1.5 percent above the S&P,” he says. “If you’re beating your benchmark by 1 or 2 percent every year, you can’t ask for more than that.”
Over the summer, two high school students called Dr. Holzhauer, asking specifically about the SMILE Fund and whether freshmen can be part of it. Yes, they can, Dr. Holzhauer told them.
The University of Tennessee was also on their radar, he says, “but they wanted to come to UTC and getting in the SMILE Fund was a high priority.”
If they decide to come to UTC, however, they must realize that there’s no slacking in the fund. Don’t do the job? You’ll be fired, just like you would in real life.
“I hire and I fire and I fire a lot,” Dr. Holzhauer says. “It’s usually pretty shocking to the students, but it’s good. I think it sends a message: This is real.”
‘Exciting’
Ashley Nichols ‘07, an investment officer at Unum, has been part of the fund’s professional advisory board since Day One. And yes, she sees the financial professionalism exhibited by SMILE students, but another talent stands out even more.
“To me, it’s about—No. 1—learning to communicate ideas verbally, to get up in a room full of peers and professionals who give you feedback.”
Giving presentations in a boardroom-like setting is a frequent task when you’re dealing with financial and investment issues, she says, and it’s a “unique” situation for SMILE students to do the same thing. In those situations, they must learn how to be confident and knowledgeable—and non-sweating—when they’re “peppered with questions and have others pick apart their thinking.”
“They’ve been up there and they can take it,” she says.
Ms. Loza-Ortiz joined the SMILE Fund in January 2015, six months before the endowment—i.e., the cash—was officially handed over. Students and faculty used the time to iron out some of the kinks in their systems, making sure everyone knew their jobs and how to do them.
The idea that they were handling $250,000 wasn’t so scary as much as “exciting,” says Ms. Loza-Ortiz, who graduated with a degree in finance. “It meant you cared about it a little bit more; you were more interested in the whole process, more accountable.”
She has no hesitation about SMILE’s influence in her life.
“I would say that it changed my career.”
Special abilities
Paul Payne, senior financial advisor at Merrill Lynch, hired Dillon Martin to be on his four-person team in part because of what the student had learned while working at the SMILE Fund. Mr. Martin was blessed with “a magnetic personality” that draws people to him and convinces them to trust his abilities, Mr. Payne says, but the lessons he learned at the SMILE Fund raised him to a higher level.
Mr. Payne points to a statement from the book Every Good Endeavor: Connecting Your Work to God’s Work: “We are most fulfilled when our passion and competency intersect at our highest point.”
“What I saw in Dillon was he was someone who had passion about what he did and yet exuded a great sense of competency,” he says.
Mr. Martin is not hesitant to credit SMILE with the certainty he has in his abilities. Such confidence may not be something that other finance undergraduates feel when they leave school, he believes.
“The SMILE Fund allows us operate from a position of strength when we come out of undergrad. Most students, when they come out of undergrad, I don’t think are in that position of strength. They’re coming out in a position of kind of begging, ‘Please give me this job’ as opposed to ‘Why I think I fit here.”
“I think SMILE Fund students go into interviews—if they’ve done it the right way—and know that there are very few candidates better than them.”
After working with the SMILE Fund, Dillon Martin now has a job at Merrill Lynch in Chattanooga