BetterInvesting clubs post long-term returns on stocks and social bonds
LINDA GLEIN AND Carol Theine went skiing together and even traveled to Greece. But their friendship grew around a very different common interest: investing.
Theine retired young and initially gave her retirement money to a broker. But as a do-it-yourself type person, she says, “I just decided that I wasn’t happy that someone else was investing my money.”
She joined a neighborhood investment club years ago, partly to learn how to invest and partly for the social aspect. “We lead busy lives, so this commitment to meeting other people at a specific time has helped me get to know other neighbors. It was a good mix of people, ”she says now.
These days, she deploys her knowledge, passion for teaching and leads management as chair of the Puget Sound chapter of BetterInvesting, a nonprofit dedicated to helping people invest smarter and an umbrella organization. national for investment clubs. The chapter covers approximately 120 clubs in Western Washington.
Glein says she’s also there for social interaction. She is also interested in the empowerment of women in particular, including herself. On the other hand, she was looking for an interest that she could share with her husband, Gary.
People find clubs through work, other social organizations, or word of mouth. The BetterInvesting website lists clubs and many also list meetings on Meetup. Potential members attend a few times before existing members vote to add them.
It is not day trading; it’s more about the basics of long-term orderly investing in good companies. This makes the clubs a long term commitment, which also helps to strengthen social bonds.
Monthly meetings are structured and organized, although many involve a happy hour before or after the meeting. Many meetings took place online during the pandemic, and some were still online. But some groups have started meeting face-to-face or having hybrid meetings again.
I attended a hybrid reunion that started with in-person members at Gig Harbor sharing lasagna; I ate my own lasagna at home and had a video chat with Glein and the other members before the club got down to business.
Each meeting includes an education segment as well as reports on individual stocks the club has and others on its watchlist. Club members vote on buying or selling shares. Each member plays an active role in carrying out and sharing research.
“One of the perks of the club is that you divide up the work,” says Glein; typically each member tracks one or two stocks, reducing the overall time needed to assess them.
Each club has its own brokerage account and each member contributes a certain amount per month, usually between $ 25 and $ 100.
Contributions are not intended to constitute a person’s entire investment portfolio, and this may be the only place a member buys individual stocks. But the principles help members assess all of their investments – how much is a given asset worth, how to assess expert opinions, and when to sell. “We hope they take the knowledge home and invest individually,” says Glein.
Clubs also help build psychological discipline which can come in handy when the market is down – or when things aren’t as good as they look. During the 2008 market downturn, “We hardly sold anything,” says Glein. On the other hand, “people fall in love with their actions, and they’re not good at seeing when there are problems”.