A small group of people I know—mostly beginners--want to start an investment club here in North Jersey. And while I’m no big fan of the National Association of Investment Clubs, it’s sort of the only game in town. We do have to learn sensible rules. Can one member put in more money than other members? How does the group decide on a purchase—or a sale?
Someone contacted the NAIC and learned—surprisingly--that it’s not forming new chapters now. It won’t even send anyone to talk to us, although we were invited to see a local club in action.
I’ve been to a few NAIC meetings—as an observer. At one, two young men were bullying the other members to let them sell covered calls. They just assumed that they could do it—without a vote. The other members remained quiet. If I had been a member, I would have asked for a vote—pointing out that someone at Vanguard once told me, disapprovingly, that when you sell calls, you are preparing to sacrifice some future appreciation of your securities.
The NAIC. Of Beardstown Ladies fame. The ladies in question counted their contributions as part of their returns--innocently. Without the contributions, the ladies were below-par investors. The NAIC has also claimed that its clubs have terrific returns—but the clubs have the option of reporting their returns or not, so it’s just possible that only clubs with especially good returns come forward. (A lot of clubs, I’ve been told, go out of business, often because of dissension.)
Also, the NAIC has regularly endorsed Aflac, which sells cancer insurance. A no-no.
A final complaint: The NAIC’s newsletter really stinks.
I’ll suggest to our group that we start with a conservative investment—a good mutual fund, like Excelsior Value & Restructuring or Fairholme. And mention that, for the future, one source of good new ideas are the stocks just added to Value Line’s model portfolios.
My sister-in-law recommends our having10 to 15 members, each one having being responsible for tracking a security.
Any other suggestions in general for running an investment club?
***
God, I hate credit-card companies. They’re resemble the companies that sell tobacco. They cause so much utter misery—irresponsibly. And they’re so tricky and duplicitous.
Sheryl Garrett, a CFP who advocates hourly, fee-only financial planning, recommends that most people confine themselves to debit cards—so they won’t have those disgustingly high late charges to pay, among other things. Come to think of it, that would make a fine public-spirited campaign: Getting people to give up credit cards in favor of debit cards.
Granted, credit cards provide some special benefits—like the extra time you have to pay your bills, your ability to really contest a bill, and possible rewards, like a little cash back. But some people can smoke all their lives, too, and not develop lung cancer. Two-thirds of Americans don’t pay their credit-card balances in full every month.
Someone contacted the NAIC and learned—surprisingly--that it’s not forming new chapters now. It won’t even send anyone to talk to us, although we were invited to see a local club in action.
I’ve been to a few NAIC meetings—as an observer. At one, two young men were bullying the other members to let them sell covered calls. They just assumed that they could do it—without a vote. The other members remained quiet. If I had been a member, I would have asked for a vote—pointing out that someone at Vanguard once told me, disapprovingly, that when you sell calls, you are preparing to sacrifice some future appreciation of your securities.
The NAIC. Of Beardstown Ladies fame. The ladies in question counted their contributions as part of their returns--innocently. Without the contributions, the ladies were below-par investors. The NAIC has also claimed that its clubs have terrific returns—but the clubs have the option of reporting their returns or not, so it’s just possible that only clubs with especially good returns come forward. (A lot of clubs, I’ve been told, go out of business, often because of dissension.)
Also, the NAIC has regularly endorsed Aflac, which sells cancer insurance. A no-no.
A final complaint: The NAIC’s newsletter really stinks.
I’ll suggest to our group that we start with a conservative investment—a good mutual fund, like Excelsior Value & Restructuring or Fairholme. And mention that, for the future, one source of good new ideas are the stocks just added to Value Line’s model portfolios.
My sister-in-law recommends our having10 to 15 members, each one having being responsible for tracking a security.
Any other suggestions in general for running an investment club?
***
God, I hate credit-card companies. They’re resemble the companies that sell tobacco. They cause so much utter misery—irresponsibly. And they’re so tricky and duplicitous.
Sheryl Garrett, a CFP who advocates hourly, fee-only financial planning, recommends that most people confine themselves to debit cards—so they won’t have those disgustingly high late charges to pay, among other things. Come to think of it, that would make a fine public-spirited campaign: Getting people to give up credit cards in favor of debit cards.
Granted, credit cards provide some special benefits—like the extra time you have to pay your bills, your ability to really contest a bill, and possible rewards, like a little cash back. But some people can smoke all their lives, too, and not develop lung cancer. Two-thirds of Americans don’t pay their credit-card balances in full every month.
