The blur of stock market highs and interest rate hikes in early 1995 signals an opportune time to slow down a bit and obtain financial advice that's not so expert, yet refreshingly sound.
It comes courtesy of the man in the street. The woman next door. Grandma or Grandpa. A co-worker. A friend or a spouse.
The nation's investment clubs let the average U.S. investor seize stock opportunities amid the warm and cozy companionship and conversation of other average investors.
Meeting once a month in homes, restaurants or community centers, these clubs pool an investment pot and vote as a group to buy or sell stocks they've researched.
Everyman and Everywoman aren't squeamish about today's market: The number of U.S. clubs with membership in the National Association Investment Corp. (NAIC) has risen to 13,005 over the past 12 months, a gain of 1,399 clubs. Their bullish, yet long-term, strategy holds firm.
The 25-year-old Quibble 'n' Nibble Investment Club, which experienced a 7 percent gain in its $200,000 portfolio the first month of this year, had logged a 20 percent increase in 1994. It has 30 members, mostly retired businessmen, who each toss in $20 to $100 a month.
"We're selectively bullish, though we've become more balanced, expanding to 17 stocks for diversity," explained Willis Ranney, president of the club, which meets at the North Shore Senior Center, Northbrook, Ill. "Our goal is growth of 15 percent or more a year, and many of our stocks hit new highs recently."
Current holdings include Abbott Laboratories, Amgen Inc., Automatic Data Processing, Biomet Inc., Century Telephone Enterprises, General Electric, HealthCare Compare, Intel Corp., Microsoft Corp., Motorola Inc., Newell Co., Parametric Technology, PepsiCo, Procter & Gamble, Rubbermaid Inc., Silicon Graphics and Walgreen Co.
Some clubs consist solely of women. The 12-year-old Northland Women's Investment Club in Kansas City, Mo., is pleased it doesn't have to put up with a traditional "macho" investment style.
"Women in investment clubs usually do their homework on stocks, while men tend to fly by the seat of their pants and not do as well," declared Judy Stokes, president of that 19-member club, whose $133,000 portfolio turned in what she termed a "single-digit" gain in 1994 of $1,609.
Ms. Stokes, who is also the elected treasurer of Platte County, Mo., says members represent numerous occupations and range in age from the mid-40s to "probably" 80.
Among club holdings are AT&T; Corp., H&R; Block, Cerner Corp., Cifra S.A., McDonald's Corp., Merck & Co., Pall Corp., Toys 'R' Us, China's Tsingtau Brewery Co., Vishay Intertechnology, Wal-Mart Stores and WMX Industries.
Clubs such as San Diego's two-year-old Bit-Buy-Bit Investment Club include men and women. With 10 members ranging in age from the mid-30s to 60, that club requires that all use NAIC investment computer software in their research.
"Our club doesn't worry about day-to-day fluctuations and is always bullish, buying stock in good strong companies with good management and adding to positions in a down market," pointed out Rick Becker, president of the club, whose portfolio rose 4 percent last year. "We build our own mutual fund."
Holdings include AFLAC Inc., Chris-Craft Industries, Nike Inc. and Sigma-Aldrich.
(An NAIC club membership is $35 a year, plus $11 per member. Included are a club investment manual, a high-quality monthly investment magazine for each member, additional free stock reports and a low-cost stock purchase plan. For club start-up information, contact the NAIC, 711 W. 13 Mile Road, Madison Heights, Mich. 48071.)
Critics say investment clubs tend to stick too closely to blue-chip selections and overlook adventuresome choices, yet it's difficult to fault a long-term investment strategy.
Thomas O'Hara, chairman of the NAIC board of trustees, suggests clubs put one-fourth of portfolio holdings in companies with annual sales under $400 million and another one-fourth in giant firms. The rest should be spread somewhere in between.
"We stress regular investing, usually once a month, reinvesting earnings and learning how to select companies that will be worth substantially more five years into the future," concluded Mr. O'Hara.