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Finding lessons in investment clubs

Tess Vigeland Jan 1, 2008
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Investment club 'Formerly Baroque' of Fairfax, Va. (Tess Vigeland)

Finding lessons in investment clubs

Tess Vigeland Jan 1, 2008
Investment club 'Formerly Baroque' of Fairfax, Va. (Tess Vigeland)
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TEXT OF STORY

TESS VIGELAND: So have you decided on your resolutions for this year?
Any of them have to do with your finances? Mine do. I vow that our family will do a complete home inventory. Put electronic copies of all of our important financial papers in a safe place. And I’m also resolved to invest in the stock market for the first time in my life. Not just through my retirement plan, but hopefully through an investment club. Because one of the biggest lessons I learned in 2007 is that it is eminently do-able.

Throughout 2007 I made several visits to the women of Formerly Baroque. They’re an investment club in Virginia. Twelve ladies in their 50s and 60s who meet once a month to talk stocks.

Bobbi: A group of women decided that they didn’t know very much about finances. And a lot of our women were single, either divorced or widowed.

Other woman:

And that’s, I think, one of the last holdouts for women — getting into finances, getting into investing. This is an area women really need to get savvy in.

So true. Now the caveat here is that most personal finance gurus will tell you to invest only in index funds. They’re certainly safer than individual stocks. But I’m ready to take a little more risk in the name of learning the machinations of the market.

These women beat the pants off the S&P 500 last year with gains of more than 10 percent in their portfolio as of November. Their meetings were an incredible education in how to take something that’s scary and foreign to so many of us and turn it into profits.

Over the course of the year they discussed things like the Baltic Dry Index, market orders versus limit orders, the sinking dollar and how to take advantage of it. More than anything they proved that it pays to do your homework.

Fran: All right, review of our positions. I have Crocs. I did their chart. It’s one of those that just needs to be watched. It’s gonna go up and down and up and down.

Yes, charts and graphs. Doesn’t sound like much fun. But put a few hours a week into it and it is amazing what you soak up.

The club bought stock in Crocs back last January based on research, but also on the fact that they just plain loved those ugly plastic shoes. Several members wore them, their grandchildren wore them, so they bought the stock at about $24 a share and sold most of it in September around $65 a share — just before the stock tanked.

They didn’t have that kind of luck with all of their investments. But they were OK with that. Through the ups and downs the club listened in on earnings calls, updated each other on CEO statements, followed the Fed, and bought and sold based on everything but gut feeling. They laughed when the person most devastated by their Crocs sale was . . . me.

Vigeland: You’re gonna sell Crocs?

Ladies: Well, that’s the problem, see, that we fall in love with these stocks. And being women I think we get emotionally attached! I don’t know . . .

More than anything, what the ladies taught me was that investment can be fun, especially when you’re in it with other people. The club even bought a little bit of Google stock at almost $600 a share, just to see what it was like to own a Wall Street darling. They’re in it to learn. And in the process they’ve managed to make money and teach some lessons I’ll be using this year.

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