Investing Women

WOMEN’S INVESTMENT CLUBS

Investing in the stock market & investing in friendship!

BY: CARRIE WILLIAMSON, LISA BUSH & FRAN ELSEN

BUY LOW, SELL HIGH!

For many members of the Lexington Ventures in Profit (VIP) investment club, the extent of their stock market knowledge when they formed a partnership in 1992 was limited. The 15 women, made up primarily of college friends wanting to stay connected, decided to forego the typical clubs (i.e., playing bunco, book clubs, etc.) to learn more about investing in the stock market.

One of the original members and past president, Lisa Bush, received some great advice from her mother’s successful investment club regarding meetings, membership, monthly dues, stockbrokers, etc. and the new VIP Investment Club was born!

In the club’s early years, members were just starting their careers and families. Monthly meetings helped everyone stay connected and up-to-date on everyone’s lives. However, the group temporarily disbanded in 2006 when members found themselves overwhelmed with family and work responsibilities.

Fast-forward to 2018, when members entered the “empty nest” phase of life while some began retiring from their careers. With more available free time, the original members decided to re-start the club, and “VIP – the Sequel” began. Today the group has grown to include additional members, and the camaraderie is stronger than ever with both old and new friends. The club now has 20 female members, including a president, treasurer, and secretary. Club minutes are recorded monthly, and stock-watch updates and discussions remain an integral part of the notes.

Once a month, members meet in one of the member’s homes to discuss and buy/sell stocks. Members research any type of company they like or any industry that seems particularly timely. For instance, during the early days of Covid, members were researching companies that were associated with the pandemic, such as pharmaceutical companies with a focus on vaccines or tech companies with an eye toward remote officing capabilities. Some members, noting their own increase in online ordering for home delivery during lockdown, decided to compare Air & Ground Package delivery companies such as FedEx and UPS.

Members of the Lexington VIP Investment Club

Stocks are purchased utilizing a “pool” of funds comprised of monthly dues paid by each member and any net gains from recently sold stocks. Once a stock is purchased, a member is assigned to be the “stock watcher” for that company. The stock watcher is responsible for tracking the stock’s pricing trends and any headlines from the news regarding that stock. The stock watcher makes recommendations as to whether the club should buy more shares, sell or hold existing shares.

Current president Susan Dean has enjoyed learning about different industries. “We’ve made some really smart, wellresearched purchases and have enjoyed success with many of the stocks in our portfolio,” said Dean. “We’ve also had a few less successful buys, but even with these purchases, we have learned valuable lessons for investing. The most important element of the club is the social connections we’re continuing to maintain while continuing to learn.”

Dean recommends giving an investment club a try! All that is required is a desire to learn about the stock market. Once you have a group of interested investors, you will need to form a legal entity and create a partnership agreement which you can do online. Next, you establish operating procedures to represent how the club wants to work. You will then need to open a brokerage account for investing in the market. There are so many valuable resources available to help with setting up a club, as well as to teach members how to research companies and make informed decisions on buying stocks. The NAIC (National Association of Investors Corporation) and Bivio (investment club software) have both been terrific resources. You will need software to keep track of your purchases and sales and to issue tax returns to members at the end of each year.

If you or someone you know has questions about forming your own investment club, check out the following tips to learn more!

Happy Investing!

Want to Invest?

One of the biggest barriers that prevents people from investing in the stock market is a lack of knowledge. With all the jargon involved, teaching yourself how to do it can feel like an insurmountable challenge. But investment clubs prove that it’s not only possible – it’s easier than you think! Here are some tools to help you get started.

Apps

Many brokerages have apps that put investing in the palm of your hand. If you are investing as an individual, these apps are a perfect way to get started. These apps can also help you keep track of stocks when you’re on the go. Beware of apps that are new startups – like any fresh venture, they could be a hit or a miss! Likewise, you have a lot to think about when it comes to cryptocurrency.

Bivio

Want to start your own investment club? You’ll need help! Bivio is a management tool designed specifically for investment clubs. Visit bivio.com to learn more.

NAIC

The National Association of Investors Corporation set up betterinvesting.org to help individuals educate themselves about the stock market. They have great resources to walk you through the process of starting an investment club – or find an already existing investment club to join that’s near you!

Investopedia

There’s not much to know about investing that you can’t learn at investopedia.com! They’re a great resource for all the latest investing buzz.

Nerd Wallet

This site is a first stop for anyone trying to expand their financial literacy. Visit nerdwallet.com to learn more about stocks – and beyond.

Robo-Advisors

Intimidated by all the legwork? Utilizing an automated investing service – often casually referred to as a “roboadvisor” – can help you get your feet wet. That said, it often takes the thrill out of buying and selling. They’re typically not a great option for investment clubs for that very reason. •