Investment Clubs’ Lessons Pay Dividends for Novice Financiers

With a college degree in microbiology and occasional substitute teaching jobs, Nancy Jaeger didn’t have the background of a typical stock market guru when she began charting public companies back in 1984.

But then, neither did the other five women in her Camarillo-based investor club. All were novice financiers just learning the tricks of the market

Thirteen years later, however, the group--nearly triple its original size--has a portfolio that includes shares of Amgen Inc., the Walt Disney Co., PepsiCo Inc., Home Depot and Intel Corp. The group’s 12-stock portfolio has a value of more than $72,000, which represents a nearly 75% profit on those current holdings.

“We didn’t know anything about the stock market--I had never even read the financial pages before,” said Jaeger, who along with the other members of her group contributes $15 a month to the club treasury. “It took us about a year of studying, learning how to read the stock selection guide, before we bought anything.”

Jaeger said her group generally follows stock market tips and philosophy offered by its parent organization, the National Assn. of Investors Corp. And in recent months, more and more Ventura County residents have been doing the same.

Last October, local members of the Michigan-based national investors organization formed a Channel Islands Council, which represents individual clubs like Jaeger’s located throughout Ventura and Santa Barbara counties.

Since the council was formed, its ranks have been increasing by about 175 new members and seven new clubs each month, according to Carol Haverty, volunteer president of the council.

“It’s amazing,” Haverty said. “People want this stuff so bad.”

Total local membership in the NAIC national group, Haverty said, now stands at about 4,000 investors--2,700 of those in Ventura County--representing nearly 200 clubs. In addition, a small number of local investors belong to the national organization without belonging to a local club.

National membership in the NAIC is about 500,000--double what it was four years ago, Haverty said. National dues are $35 annually for those who do not belong to a local club, $14 a year for club members.

“The NAIC is to investors what Consumer Reports is to consumers,” Haverty said. “Education is the thing. Nobody is going to try to sell you anything. People tend to trust that, so if they’re trying to decide on investing money, they will come to the NAIC and review our philosophy of investment. They use us as a guide to making their investments.”

Members of individual clubs create a joint portfolio and track the stock market for future transactions. They meet monthly to discuss their progress, with each member assigned to watch a particular stock or industry.

Regional councils provide support through investment strategy and resources passed along by the national organization. The Channel Islands Council also offers family investment classes for parents and children, tours of local companies and investment seminars, featuring local and national business and investment leaders.

Tonight, the Channel Islands Council will host a program at Camarillo’s Los Primeros Structured School, at 2222 E. Ventura Blvd., to encourage local residents to invest in American companies. The group will present a similar program in Santa Barbara on Friday.

Another forum, scheduled for Santa Barbara in June, will include presentations by a member of the National Assn. of Investor Corp.’s national board and representatives from the publication Investors Business Daily and four local publicly held companies.

Haverty said the rapidly growing interest in investor groups can be attributed to several factors, including the increased use of the Internet.

“Historically, people who joined investment clubs were usually a little more educated, affluent and older,” Haverty said. “Now they are younger, not so affluent, not so educated, and a lot of it has to do with the Internet. All of a sudden there is information that is available readily that was not before.”

Haverty said she is not surprised by the rising club membership from Ventura and Santa Barbara counties and said those numbers could easily grow 10 times their current level. Locally, she said, the typical participant is in his or her 40s or older and anxious to establish a retirement nest egg.

“There’s an urgency with them,” Haverty said. “People are looking to hang onto something they already have, so they turn to the stock market. The stock market is on a roll. We’ve had an up time for eight years.”

Norma Maidel, a member of another Camarillo investor club associated with the national organization, said the primary goal of her group is to have fun. But it doesn’t hurt to make a little money along the way.

Maidel’s group, made up predominantly of schoolteachers, has a portfolio of 13 stocks including Lucent Technologies Inc., Merck & Co., AFLAC Inc. and McDonald’s Corp., with a value of about $66,000. Club members cashed in some of their stock a little more than a year ago and paid for a weeklong trip to London for the entire group..

“We have a five-year goal--double our money and go to the Taj [Mahal] for tea,” Maidel said.