For students with savings in the thousands of dollars, letting it languish in a low-interest savings account may seem wasteful.
But Gary Weaver, associate director of student aid, warned that students must be prudent with their money.
"There are so many unknowns and living expenses ahead of you," Weaver said. "You're going to need that cash."
"Rate of return at this point is almost immaterial," he added.
Weaver, who worked as a Merrill Lynch security broker for six years and is a licensed certified financial planner, advised that students only invest money that they know they can do without. He said that even if a student is prepared to lose his or her investment, a low-risk mutual fund is all that is appropriate.
"Good mutual fund groups pay 5 percent with nominal risk," he said.
Associate Professor of Economics Greg DeCoster also discouraged taking too much risk.
"If you're going to invest in equities, index funds are the way to approach it," he said.
But DeCoster, who teaches Finance I and Finance II, said that before a student thinks about investing, he or she should take care of any interest-accruing debt.
"The highest return investment you can make is to pay off high-interest credit card balance," he said.
Senior Jon Crowley suggested that students could be more adventurous.
"If you know what you're doing, know what you're getting into, you can accept the risk," Crowley said. "There's no reason not to take a portion of your earnings and try to get a higher return and learn about the markets and investment."
Crowley, the president of the Bowdoin College Finance Society, worked at a California money management firm in the summer and will start working full time in hedge fund strategies at Goldman Sachs after graduation.
Crowley recognized the dangers of investing at an early age, noting, "You really need to be aware you can lose a lot," and he also cautioned that investing in the market is not simple.
"Be very careful about fees and commissions," he said.
"If you make money, you need to pay capital gains tax of 15 percent," he added. "You are creating some extra hassle."
But he concluded that investing is an important skill that students should familiarize themselves with.
"It's a great way to learn about investing at a young age—where it's not the end of the world if you lose some money," Crowley said. "It's better to lose a little money now than to start gambling with your retirement savings when you're 50."
DeCoster recommended reading "The Little Book That Beats the Market," by Joel Greenblatt, for students who are ready to invest.
Crowley suggested investing in Exchange-Traded Funds, securities that usually track indexes but trade like a stock, as the funds are relatively stable but can still yield a high return.
Weaver said that it is not too soon for students to begin thinking about investing for retirement. Weaver advised students to put $5,000 into a Roth IRA each of five years soon after graduation and then invest the money into a no-load equity index mutual fund.
"If you get $25,000 in before you're 30, when you retire by the time you're 65, you'll have a million dollars," said Weaver, expecting an average of a 10 percent annual return. "All I do with Bowdoin seniors when they graduate is point this out."
Weaver was not so optimistic about the immediate future, though many financial media are predicting a strong 2007.
"We're in a late-stage bull market here," he said. "The market is strong, but it's slowing."
Director of Student Aid Stephen Joyce said that students need not worry that any earnings will reduce their financial aid. Student contributions are calculated assuming annual earnings of approximately $2,000, and students will not be penalized for making additional money.
But Weaver warned students not to head into the market without knowing the risks.
"The equity market giveth," said Weaver, "and the equity market taketh away."