Statement of Purpose
The Davis Student Investment Program was established to provide students with an opportunity to apply their presentation and decision-making skills in the context of investment management. The program was designed to set aside funds for investment purposes and to provide scholarships for University of Idaho students.
The Davis portfolio is comprised of common stock, bonds, and cash equivalent securities. In accordance with investment objectives stated below, assets in the portfolio should be managed in a moderately conservative manner. In this context, conservative relates to such issues as expected long-term rates of return, volatility, investment vehicles, and diversification among economic and industry sectors and individual securities.
The portfolio should be managed with the following investment objectives:
- Growth of Capital: The asset value of the portfolio, exclusive of contributions or withdrawals, should grow in the long run and earn at least a yearly rate of return equaling the return on the S&P 500 index.
- Preservation of Capital: Asset growth, exclusive of contributions and withdrawals, should exceed the rate of inflation given by the CPI in order to preserve the capital of the portfolio’s assets.
Investments are to be made consistent with the safeguards to which a prudent investor would adhere subject to the limitations stated herein. Tax-related issues will not enter into consideration in the management of the assets. Realization of capital gains and losses should be viewed solely in terms of investment merits. All assets selected for the portfolio must have a readily available market value and be marketable.
The portfolio may consist of common stocks, bonds, warrants, and cash equivalents. It should be well-diversified to avoid undue exposure to any single economic sector, industry group, or individual security.