Pennies Today, Prepared Tomorrow

by James Leonard | Staff Writer

SCRANTON – Professors at The University of Scranton are encouraging students to begin making investments, even if it is just a few pennies per day.

Christos Paraginas, Ph.D., an economics and finance professor at the University, said that making mistakes is part of investing, and making them early on will ultimately help young people learn and grow.

“The sooner someone begins investing, the easier it will be to achieve his or her goals for retirement,” Paraginas said. “Also, most people make mistakes. If you start early, you have a lot of time to make and follow a sound investing plan.”

One way for students to begin investing early is through mobile apps. Many investing apps targeted toward younger people have emerged in recent years. Some apps appeal to students because they claim to only take a few pennies to begin investing for the future.

As a busy student, Christopher Volpe said he uses the Acorns app as a way to invest for the future without having to watch stocks closely.

“You can choose whether you want your stocks put in low-risk stocks or high-risk ones,” Volpe said. “It also takes money out of your debit card purchases by rounding it up to the nearest dollar and then invests that spare change. I feel like it’s better than doing nothing.”

Paraginas also had positive things to say about investing apps, although he does warn students not to treat investing like a game.

“Investing apps are very easy to use, and they don’t charge a commission,” Paraginas said. “Investors should understand that buying and selling frequently – buying a hot stock and selling a stock that doesn’t perform well – is not a good strategy. Buying and selling frequently is gambling, not investing.”

Paraginas emphasized that having a diverse stock portfolio is important for not only making money while investing, but also to protect investments in case one of them falls through. He said that one good way to do so is through investing in S&P 500 companies, which are the top 500 companies in the United States worth at least $8.2 billion. Paraginas they are not only safe and cheap, but usually on the rise.

Other professors at the University provided insight on alternatives to investing apps. Many large investment firms have online brokers that will take a user’s money and make investments for them.

Iordanis Petsas, Ph.D., chair of the Economics and Finance Department, advised students to invest online without using mobile apps.

“Students should keep in mind that there are many online platforms and tools available for starters,” Petsas said. “There are low-cost online brokers such as Charles Schwab and Fidelity Investments, though these do take percentages from investments like a real broker, unlike apps like Acorns or Robinhood.”

Petsas said it is a good idea for students in various majors at the University to take at least one finance or economics class, especially if they want to begin making investments.

“It is a great idea for students to take economics and finance classes during their time at the University in order to be aware of the opportunities and challenges that can arise from the financial uncertainty the world is currently facing,” Petsas said.

There are stocks suitable for an array of different financial situations held by students, according to Petsas, who also said those situations should not necessarily stop them from investing.

“If the money is not needed for any specific purpose in the near future, they can be placed into the stock market,” Petsas said. “On the other hand, if the money, for example, is needed for tuition and college related expenses in the near future, a safe investment such as a certificate of deposit (CD) will be a smarter choice. The amount of investment can be low as long as it motivates you to keep an eye on the market and makes you analyze the effects of the markets on your investment.”

It is a particularly good idea for Kania School of Management (KSOM) students to start making investments, according to Petsas.

“For economics and finance majors, investing can be easy and fun as it essentially gives them an opportunity to apply what they learn in their economics and finance classes,” Petsas said. “Those students who are involved at the PRISM club at the University have a great opportunity to learn best strategies by investing University money.”

Whether it is a few pennies per day on a mobile app or using an online broker, students can easily begin preparing for their futures by investing. Petsas said there is virtually no reason for students to avoid investing.

“The most important aspect of investment is the timing,” Petsas said. “It is important for college students to start investing as early as possible so they can accumulate knowledge and experience.”

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