You don’t have to fly solo with the stock market
Maybelle Church of Nevada City knew she had to do something after losing $20,000 in a stock investment and then being steered toward bonds “that were totally inappropriate for me.”
“That woke me up,” she said. “I decided I either have to get out of this entirely or learn more.”
She decided to learn more by joining Mountain Money Investors of Grass Valley, seven women who value the knowledge they gain about financial affairs as much as the money they make through their investments.
The women meet monthly in the Grass Valley home of Donna DeJong, where each has the task of reviewing a stock in the club’s portfolio and analyzing an issue they may want to buy in the future.
Club members are value-oriented, searching for stocks that have a low price and good growth prospects. The extensive analysis required to identify such winners is also educational for the members.
“We want a greater understanding of our own finances, a subject a lot of women are afraid of,” DeJong said.
The club is affiliated with the National Association of Investors Corp., an organization that welcomes investors of both genders, but Mountain Money is exclusively for women. “The intent was to keep the group female, for women’s education,” DeJong said.
Club members believe most people aren’t knowledgeable enough to make informed financial decisions. Women who let their husbands deal with the family money can be particularly in the dark.
“People just don’t know enough, both men and women,” said Claudette Paige of Grass Valley, a retired business owner. The knowledge she’s gained from the club has even impressed her stock broker.
“He’s indicated I’m one of his more educated clients,” she said.
NAIC has 14 clubs in western Nevada County, all of them seeking “good companies at good prices,” according to the organization’s Web site.
NAIC publishes a monthly magazine, “Better Investing,” offers a variety of software programs for screening and identifying stocks, and provides training for neophyte as well as experienced investors.
Clubs have access to Value Line’s evaluations of companies and NAIC’s Stock Selection Guide, a detailed company analysis that club members complete when they are thinking about buying its stock.
Mountain Money Investors seeks value and is in the market for the long term. “We’re value-oriented,” Paige said. “We don’t want to pay too much.”
“We’re women, we’re always looking for a bargain,” Church added.
Like most investors, their goal is to identify a stock before it becomes popular on Wall Street. Investment decisions are made by a majority vote of club members, and the vote isn’t always unanimous.
Investment decisions are governed by some basic rules: A company has to be at least 5 years old; no stock can make-up more than 20 percent of the value of the club’s portfolio; and investments must be diversified.
The 20 percent rule means the club has had to sell shares of First Data Corp., a company that has done well in the market in recent years. Because the club currently holds Home Depot and Lowe’s, it is thinking about selling the former and putting the proceeds into another sector of the economy.
And the 5-year rule helped the club avoid getting burned in the dot com bust. “That’s gambling, and we’re so close to Reno,” Paige said.
Current club members want to double their money during the next five years, a 15 percent annual return. Members contribute $25 a month to the invest fund and buy the shares – called units – of women who leave the club. Each member has $2,500 to $5,000 invested in the club.
But all of the members stress the knowledge they’ve gained since joining the club.
“I regard it as a learning process,” Church said. “I learn from the wisdom of the other members.”
“I think its wonderful,” said Judy Wilson, DeJong’s neighbor and a retired escrow officer. “The experience has been a real eye-opener.”
Women interested in joining Mountain Money Investors can contact Donna DeJong at 272-7896. For information on other NAIC clubs in the area, call toll-free (877) 275-6242, or go online to http://www.better-investing.org.
Where they put their money
Here are the current investments of Mountain Money Investors of Grass Valley. Club members caution that the stocks were good values when they were purchased but may not be good investments at current prices.
• First Data Corp.
• The Home Depot, Inc.
• Intel Corp.
• Lowe’s Companies, Inc.
• Medtronic, Inc.
• Pfizer, Inc.
• Starbucks Corp.
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