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“He died on a Friday and on Wednesday I had to come
in and run a business.”
Sharon Newman tells of the sudden turn of fate that lead her
to become the President of Action Envelope in Farmingdale,
after her husband Ken died unexpectedly of a heart attack.
She was forced to take over the company that her husband had
spent over a decade building.
As an English schoolteacher, her financial experience was
nonexistent. Literature and grammar did not translate into
numbers, and Sharon found herself dealing with the grief of
losing her husband, running a business, and the reality that
she had little idea of the financial workings of the family
investments. She joined an investment club to gain control
over her financial portfolio and learn the basics of investing.
Now more than four years later she is the president of the
Investment Club associated with the Long Island chapter of
the National Association of Women Business Owners.
Sharon says, “The investment club teaches you how to invest,
and what to keep in your portfolio.” The group meets once
a month to assess the portfolio, discuss research on upwardly
moving companies and make decisions on buying and selling.
Sharon says that working within a club forced her to take
responsibility for her financial decision making process and
taught her not only how the market works, but how to make
educated decisions on her own portfolio.
Sharon is not alone.
More and more women are joining investment clubs not
only for the support but also for the learning experience.
According to the National Association of Investors Corporation,
the percentage of all-women investment clubs has increased
from 41% to 54% from 1995 to 1999.
The NAIC also says that often education is generally
more important than making money, but many women’s clubs are
doing both. In fact, in 1999 women’s clubs that reported their
results to the NAIC had an average lifetime compounded return
of 32.1 percent versus 23.2 percent for all-male clubs.
How it works
Judy
Beckman, is a certified financial planner who for more than
18 years has made it her passion to educate women on financial
issues. She oversees Sharon Newman’s NAWBO investment club
and says joining a club is a good way to educate yourself
on the basic principles of investing but that, “what you learn
in an investment club doesn’t make you a financial advisor.”
It’s still a good idea to have a professional financial consultant
who can help you plan your moves,
and then follow through with the execution of the transaction.
A typical group meets once a month and has about 20 members.
Generally the average contribution is about fifty dollars.
It’s a great way to test the volatile waters of the marketplace
without losing your shirt according to Judy who adds, “You’re
learning to invest with little amounts of money and can purchase
companies that you may not have taken a chance on, if investing
on your own.” With the participation of an entire group of
women there are also business benefits. Choosing a group of
women with diverse interests may lead to some unusual networking
opportunities with business owners you wouldn’t normally gather
with. Also, each women offers her
take on the workings of wall street, which companies
are worth looking into, and her own intuitive sense of where
the market is heading.
“Investing in a club is a group effort.” Judy says. She says
it’s a continuous educational experience
which eventually leads to the confidence building of
each individual investor. That confidence will create a solid
foundation for the investing process. Each member is assigned
a responsibility within the group. The research of potential
purchases is just as important as managing the group, or reporting
on the clubs assets and losses.
| Monthly
Meeting Rundown: |
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| A. Contributions are collected.
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| B. Treasurer’s report is examined
– current cash and assets of group.
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| C. Assessment is made of portfolio
and the value of the companies in the portfolio discussed.
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| D. The research and development
information of the companies being considered for
purchase is discussed.
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| E. Updates on companies and
news events and media sources that present new information
on the company are discussed.
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| F. Decisions on transactions
are voted on.
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| G. Investment advisor is notified
of changes and executes transactions.
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Joining
a Club
32,000
investment clubs around the world belong to the National Association
of Investors Corporation (NAIC) You can find their website at www.better-investing.org.
This website provides information on joining a club, starting
a club and offers numerous articles and tips on investing.
Also check out www.investorama.com
and www.wfn.com for more
information on clubs and investing.
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