Winter 2024 Update

I hope you all had a good Winter and are enjoying your Spring so far!

Sophomore Year Winter Quarter Highlights: 

School:

• I just finished my Winter Quarter and am now on Spring Break! This quarter, I took four classes: Introduction to Archaeology, Global and Cultural Environment, Introduction to Managerial Accounting, and Information Systems and Analytics I (aka Stats).

• I finished my time as Brotherhood Chair at my Professional co-ed Business Fraternity, Alpha Kappa Psi, at Santa Clara University. This quarter, I organized a bowling event and a mini golf event for the chapter to improve brotherhood bonding. 

• I continued to work in the Department of Modern Languages and Literature, where most of my time was spent making copies, faxing documents, and making fliers for course registration on Canva.🙂

• I also worked as a Peer Educator for my International Economics class after my professor (for whom I did research over the Summer) invited me to be one.🧑‍🏫

• I was accepted into my Paris Study Abroad Program! I will be studying there as part of the Paris IES Business and International Affairs Program in the Fall of my junior year.  🥐🇫🇷

• I completed my first quarter as part of the Leavey Scholars Program, an invite-only program that…. During the quarter, I took an honors-level course that is only offered to students in the LSP. Our class created a 50-page case study on Taiwan Semiconductor Manufacturing Company (TSMC) used in the Leavey School of Business’ annual case study competition. I am proud to have been one of 5 sub-editors who went above and beyond in our contributions to the case study and attended the case competition to help with judging. While I don’t expect anyone to read the entire case study, I am proud of the work that our class completed on the study, considering the role that TSMC and its chips play in today’s tech world (for those who are interested, the PDF is attached at the bottom of this email). I was also mentioned in the Leavey School of Business article about the competition. Here is the link! 🧑‍💼🏢

• For my Intro to Managerial Accounting Class, I created a mock vegetarian burger company with two other classmates called E’s Burgers. We compiled most of the financial work needed to set up the company in an Excel spreadsheet (also attached at the bottom of this email for those interested in checking it out). 😀📈💲

Professional: 

• This quarter, I achieved my goal of meeting with at least one business professional per week, all of whom were gracious enough to be added to this mailing list! I met with people from Coldstream Wealth Management (where I will be interning this summer), Fidelity, Brighton Jones Wealth Management, JPMorgan Chase, and Wells Fargo. 

• I also attended an Ernst and Young (EY) networking event organized by Alpha Kappa Psi, where I talked with SCU alumni who currently work there, along with campus recruiters. I even got an EY hat!

• I read the news! Each morning, I have been trying to read the WSJ “10 Point” and “Wealth Adviser.” While I have not been successful in reading the news every day, I now understand its importance, and I am working my way towards seven days a week.

• I attended an Accounting Leadership Series Event with guest speaker Jie Pan, who is the current head of Corporate and International Accounting at Atlassian and previously worked at Facebook as an Assistant Controller. While admittedly, the event was for extra credit, and I am not an Accounting major, it was very valuable in teaching me the versatility of a business degree.

• I also started a JPMorgan Private Bank Job Simulation with Forage, which is a service that allows people to get a glimpse into various roles at different companies. After a few more hours I will have a foundation for what a day in the life of a Private Banker looks like at JPMorgan. 

Life: 

• I am currently on my spring break, which has been a much-appreciated rest from school after a long winter quarter. However, it has not been restful in the traditional sense, as it has been filled with travel! I went to New York to visit friends, then returned home to Seattle and immediately left for Tahoe to go skiing with my family!  After Tahoe, I once again returned to Seattle for a few days and had a great Easter dinner with my family. 

• I look forward to the Spring Quarter at SCU and being in Seattle again this summer!

What’s Next?

• Next quarter, I am taking four classes once again: Digital Filmmaking, Introduction to Programming, Statistics and Data Analytics II, and Financial Management. 

• I will continue to work in the Department of Modern Languages and Literature. 

• I will continue to network with business professionals (I aim to continue to meet with them at least once per week). 

• I am beginning to apply for Summer 2025 Internships (yes… it is indeed quite early, but this is when the recruiting season starts, as crazy as that may sound!

Recommendation: 

I listened to a podcast episode titled “How to Analyze ETFs to Make Better Investments” from the “Money for the Rest of Us” podcast by J. David Stein; I found it very interesting, and here are some things that I learned. Since 2014, investors have pulled $1.9 trillion out of stock mutual funds and added $2.9 trillion to stock exchange-traded funds (ETFs). ETFs are now more popular than mutual funds for various reasons, such as fewer fees and ease of trading. While ETFs have become more popular, the amount invested annually into ETFs and mutual funds has decreased immensely over the past few years, from $2.2 trillion invested during 2021 to $67 billion invested during the course of 2023. This is because the markets were very bullish after the pandemic, and everyone was buying at low recession-level prices. 

Another piece of the podcast that I found interesting was the shifts surrounding active and passive ETFs. As I learned from the podcast, historically, active ETFs have sought to outperform the market through buying and selling securities (stocks, bonds, etc.), whereas passive ETFs essentially aim to mimic the market by purchasing various indexes and sitting on these investments. While I understand this may not be very exciting, what is interesting is that for the first time in history, passive ETFs have become more popular than active ones. People have realized passive funds are more stable and typically beat active funds, with an average ROI of around 8% year-over-year. This is where another interesting fact comes into play. Because passive ETFs are becoming more popular, active ETFs are actually becoming more passive, too, to stay competitive. For example, the largest active ETF, the Equity Premium Income ETF managed by JPMorgan Chase, which has over $31 billion in AUM, generates most of its returns not from buying and selling securities like it is “supposed to” as an active ETF, but from generating income from selling call options. This means that this fund uses direct income to increase shareholder value. JPMorgan is not alone: other top “active” ETFs have taken a passive approach to generating performance with low turnover. OK, yes, this is likely very confusing to understand (it still is for me after listening to the podcast three times), so I will simply highlight the key points: 

1. ETFs (which are more passive and easily accessible funds) are now incredibly popular, and everyday people are investing in them more; 

2. Because so many more people are investing and there is a fear of recessions, stability is important, which has caused passive ETFs to gain in popularity; 

3. Many of the largest active ETFs are changing their model to become more passive to appeal to more investors. 

This led Stein to conclude that U.S. citizens and corporations have become more passive in their investing strategies over time.

While I was not sure whether or not to include this last paragraph because this email is already obnoxiously long (my apologies), I can’t skip this because it is also very important. On the podcast, Stein argues that the average American investor is less informed than they used to be due to the ease of access to investing in the 21st century. This increased amount of investment has caused many to believe that ETFs are overvalued, creating a bubble, but Stein claims ETF prices are not inflated. Because there are over 3,000 ETFs that use hundreds of different methodologies to track the major indexes, Stein argues this diversity naturally balances prices so that no bubble is created.

If you take anything away from this “recommendation” section of my mailing list, the U.S. investor is becoming more passive and investing in ETFs. ETFs are stable, easy to manage, have low fees, aren’t going anywhere, and will make you money well into the future if you are patient and willing to take the passive approach. Also, listen to “Money for the Rest of Us” by J. David Stein for more useful info like this!    

If you have any other book recommendations, podcasts, etc., please send them to me! 

Best wishes,

Jenson Hart