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what I did find VERY interesting was the concept of a "faux" Investment Club... where you meet as a group to discuss companies, strategies, screening methods etc, but the club does no investing... each member invests on their own... an idea that works for me...

AM, Investorgrrl, et al,

I've been a participant in a "faux" investment club for more than 5 years now, and I really enjoy and benefit from it.

When we started, we didn't know each other very well, and quickly determined that we did not want to mix our money, for a variety of different reasons. While all within a 10 year age range, we have different income levels, different resources, different demands on our finances, different goals and priorities, different risk tolerance levels, different levels of investment "savvy." Most of us have the ability to invest via tax-advantaged retirement plans and interest in doiing so, and no one had interest in generating taxable events via the club, or dealing with all the related paperwork (by-laws, income tax filing, etc.). We decided that our primary interest was educational (and okay, a little social).

So, we "invest" in and manage the "Virtual Vapor Portfolio." Although our joint investment is paper only, you wouldn't believe it to hear the discussions at our meetings. We don't bicker, although we occasionally have heated discussions. We do analyze and discuss financial data, corporate news and projections. We operate to an agenda which has a number of common areas from meeting to meeting, but also includes a variety of educational topics. Our stated goal is to identify investments that any club member might reasonably make, and our initial performance criterion was a 15% annual return (in which you double your money in 5 years).

We started as an NAIC-focused club, used their fundamental analysis techniques to put together a spreadsheet that analyzes corporate earnings based on the SSG. However, as the economy was shifting from "old" to "new," we determined that the NAIC's "value" orientation put a lot of investments out of reach. Since many of us work in the general area of computers/technology, to avoid this area because it didn't fit a value bias seemed unreasonable. Over time, we've learned enough to modify the spreadsheet to make it more aggressive, a little more forward-looking than the NAIC's.

Lest you think this is all fantasy, a mere game in which none of us really stands to win or lose anything, there is almost nothing in the VVP that one member or more does not personally own. So our interest in the stocks we own is very real, and motivates us to pay attention.

Baltrad1 (who I believe asked the question, sorry if I'm misremembering), we use Value Line as the source for most of the data we plug into the spreadsheet. They're certainly not infallible, but they do offer projections on data other than earnings that is not easily obtainable elsewhere. The data is available at little to no charge at our local library and fits nicely into the NAIC's SSG (or our modification thereof).

It has been a remarkable interaction between a group of intelligent women, one in which we all have gained enormously, both in understanding of financial and investment matters, and in increasingly deeping friendship.

I started out in a "fog." I lucked into an investment that was very profitable, an opportunity to participate in a bank IPO in which I happened to personally know the president, VP & a board member. I merely and blindly followed along in their wake, and achieved a "14-bagger." This was a real turn-on, WOW! Fortunately, I was acutely aware of how little I understood, and decided I really needed to educate myself in the area of investing before putting more money to work. I started watching CNBC and reading everything on finances and stock assessment I could lay my hands on. At first, the news reports and reading articles seemed to be in Martian (well, okay, maybe Latin). I understood perhaps 2 out of 10 words. But I persisted, and one day someone asked me an investment question, I found I could actually give a reasonably coherent answer, much to my surprise. And I knew I had advanced even more when I watched Alan Greenspan address the Senate and was able to at least partly follow what he was saying!

I was probably the most enthusiastic about learning about investing when our club started, and worked hard at getting other members excited, and we've all come a long way. One of our members has a daughter in college and another headed that way. Her resources are limited, but she is now actively DRIPping several stocks and makiing modest additions monthly. Others of us have made and continue to make buy/sell decisions for our portfolios based on our research and evaluations. Our results have not been startling, if you compare to the high flyers, but we've exceeded our initial 15% objective, so we're reasonably satisfied.

So, to make a long post even longer, I offer a couple of recommendations to those who are considering an investment club.

1. Take a "risk assessment" test, and repeat it from time to time. People's risk tolerance changes depending on what's going on in their lives. If the objectives and perspectives in the club change, it will be be helpful to know.

2. Use the club experience and other people's perceptions on potential to help with your personal investment choices. If you must do a joint investment, make it a small amount, one that you can afford to "play" with. Reserve larger amounts to invest on your own, in companies that fit your own risk profile.

3. If you're joining an existing club, attend at least one meeting before making your decision, to make sure others have similar risk tolerance and investment objectives, and that the peopls are those you feel you can trust and/or are interested in associating with. If you find yourself ill-at-ease, it's probably not a group you want to be combining finances with.

4. Make the focus of your experience educational rather than profit-focused. Interacting with others helps you learn about the stock market, individual stocks, assessment allocation and much more, and hearing others perspectives on financial matters, their personal goals and objectives and more can help you evaluate your own.

Sharing the experience with others in your life can be very rewarding, on many levels!

Best wishes and good luck to you all,


P.S. Two of our club members are battling cancer, and this has been a real wake-up call for all of us. One diagnosis occurred recently, and our last two meetings have been side-tracked in related discussions and sharing of feelings. Stock performance doesn't seem so important to us right now. The friendships that have developed as a result of our association through this common interest have perhaps been our club's greatest returns on investment.

(Sometimes life really sucks, doesn't it?)

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