| Investment clubs getting younger Move over, Beardstown Ladies USA Today; Washington, D.C; Apr 21, 1997; Sandra Block; Abstract: Most of the members of this Canton, Ohio, club are professional women in their 30s who squeeze club meetings in between child care and work. And unlike traditional investment clubs, which often hold on to their stocks for years, the Mahogany Association darts in and out of stocks at a clip that would make an aggressive mutual fund manager blush. Full Text: Copyright USA Today Apr 21, 1997 The Mahogany Association is not your grandmother's investment club. Most of the members of this Canton, Ohio, club are professional women in their 30s who squeeze club meetings in between child care and work. And unlike traditional investment clubs, which often hold on to their stocks for years, the Mahogany Association darts in and out of stocks at a clip that would make an aggressive mutual fund manager blush. `We're traders at heart,'' says Jeaneen McDaniels, 37, the club's treasurer. ``Our goal is to make money quickly.'' And they do make money -- if not quickly, at least over time. The average investment club guides its portfolio to a 12% annual return -- better than many mutual funds, according to the National Association of Investors Corp. (NAIC). Success like that has resulted not only in a boom in clubs but a big change in their demographics. Long dominated by retired investors, the clubs today are younger, more aggressive, and more diverse. The average age for investment-club members has dropped to 54 from 65 a decade ago, says the NAIC, the umbrella group for 28,000 investment clubs. And the average will likely fall further in the next few years. ``Our newer members are in their 40s or younger,'' says Kenneth Janke, NAIC president. ``It's not that we're losing older people, it's just that many more younger people are getting involved.'' The youth movement worries some older members, who fear the newcomers will lose interest once they realize the stock market isn't invincible. ``Many of these young investors have never seen a downturn, and I don't know how they'll react,'' says Lou Methner of Denver, who has belonged to investment clubs for more than 30 years. Younger members disagree, arguing that they, like their elders, are long-term investors. And, if anything, the stock market's recent volatility has heightened the Mahogany Association's interest. McDaniels says club members pay little attention to market dips, unless they see a buying opportunity. ``We've been through this time and time again,'' McDaniels says. ``Oftentimes we don't even know it has happened.'' Contributing to younger members' enthusiasm: The 61/2-year bull market. Even with the recent declines, the Dow is up 175% since November 1990. During the same period, the number of investment clubs rose from 7,000 to nearly 30,000. Many of the new members are in their 30s and 40s. Interest in investing and investment clubs has led to some unusual alliances. The Tailgaters Investment Club of Buffalo was launched two years ago by a group of season-ticket holders united by adjacent parking spaces at Rich Stadium and their love of the Buffalo Bills football team. The group, ages 30 to 50, meets at 9 a.m. on game days. The first hour is ``all business,'' says Joe Geraci, 49. ``After that we cook, we eat, we party and we go watch the game.'' Members don't mind showing up early to talk stocks, although occasionally they've been forced to meet in Geraci's van to defrost the libations. ``A beer freezes quick at 45 below,'' Geraci says. The Beardstown Ladies. This phenomenally successful club of mostly retired Midwestern matrons beat the market for nearly a decade, cranking out average gains of 23% a year. Their 1995 book, The Beardstown Ladies Common-Sense Investment Guide, topped the best-seller list for weeks and led to a video, a second book, and hundreds of television appearances. By demonstrating that ordinary folks can beat Wall Street pros, they drew national attention to investment clubs' impressive performance. Williams, another longtime club member, says that some younger members may have an unrealistic view of their stock-picking abilities. It's the responsibility of the older members to let some of the air out of their expectations, he says. ``We have to teach people to realize that just because you have stocks going up, it doesn't mean you're brilliant.'' A look at members, clubs Profile of the typical investment club member Sex: Female Average age: 54 Education: College graduates (46%; 32% have advanced degree) Employment: Full time (61%) Occupation: Professional/managerial (39%) Household income: $100,000 or more (30%) Investments: Personal portfolio: $201,000 Club portfolio: $95,000 Years investing: 9.5 Investment priorities: 1. Retirement 2. Financial security 3. Children's education The number of investment clubs has skyrocketed. members of NAIC: Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission. |
| U.S. A. Today April 21, 1997 |