A Gender Thing: Women Investors
It's hard not to like Wall Street these days. With a phenomenal jump in stock prices in the past seven years, this is the longest running bull market in history. And the end isn't in sight yet. Sure, naysayers bite their nails and wait for the fat lady to sing, but investors just keep plowing money into the market.With everyone keen to take advantage of this long bull run, investment clubs are popping up all over the place. And women are some of the newest arrivals to the investment game.Cheryl Moore, 35, a mother of three, is the typical investment club member these days. She and a group of 14 other women gather together once a month at the Woodlake United Methodist Church to discuss the market, and to make investments. Pooling their money, group members pore over annual reports, investor guides and other tools of the trade. Each month the group invests almost $400 in the market. Their best showing so far is a 25 percent gain with a credit card company."We are a group of women of diverse ages and interests," says Moore. "Our members range from 35 to 70, and that's been a benefit because everyone has different investment needs and agendas." Moore's husband has little interest in Wall Street, so Moore manages the family portfolio. "I needed to be a bit more savvy," she says. "My husband is happy that I have this interest."Investment groups are a good place to learn how the stock market works. Most people consider the money they invest with an investment group to be something akin to "play" money, while they save the real big bucks for their own private portfolio. Still, the experience and fun people have in an investment group can ultimately bring big rewards.Investment groups got a boost several years ago when a group of women, calling themselves the Beardstown Ladies, published a book about their investment successes, "How We Beat the Stock Market -- And You Can, Too." The ladies, a group of inexperienced investors, chose stable, reliable companies to invest in, and reported an impressive 23 percent gain in their portfolio wealth.Pat Sullivan, a broker with Wheat First Butcher Singer, says women make good investors because they don't let their egos get in the way of a solid investment strategy. "When a woman is driving and she gets lost, she has no problem asking for directions," Sullivan says. "Well, it's the same with their investments.Women do not want to go forward and put their money on the line until they know that the investment is right for them."That kind of mentality, and the cautious, deliberate approach to investing that goes with it, usually serve female investors well. The market doesn't often reward jittery investors who try and "time" the market, often selling at the slightest hint of a downturn. Instead, the market benefits patient investors who stomach the natural ups and downs on Wall Street.Still, investment clubs do have their drawbacks, Sullivan says. "They have difficulty getting good research, and since the clubs usually deal with smaller amounts of money, the members often don't see a great deal of return." Sullivan says the clubs are a "good place for women to learn about the market, and to grow in confidence about investing." She agrees with Moore, however, that investment clu bs are no place to sink the family fortune.The first purchase for Moore's group was Motorola, and the stock quickly nosedived. "That was a big dose of reality, watching our stock slide like that," Moore says. But since that sudden tumble two years ago, the stock has rebounded and the group has recovered its initial investment. "In a sense, this is only play money," she says. "We take what we learn here and use that knowledge to create our own portfolios." Moore's group interviewed five brokers before deciding on one, a female broker. Only professional stock brokers can make trades on Wall Street. Joanne Cash has been a member of the Monday Money Club, a group of 17 female investors, for almost four years. Like Moore, Cash says she's in the market for the long haul. "We've done well," she says. "We had one technology stock that made us a lot of money." She says the group averages an 11 percent return on their investments each year. They did take a dive with Euro Disney, she says."We went a ll the way down on that one, but it's coming back." The Monday Money Club is in for the long haul, and rarely sells a stock. Like Moore's group, Cash's group uses investment magazines and guides to help them choose their stocks. "We're not trying to be experts in this," Moore concludes, "but simply better stewards of our money and our family's money. We don't see this as a get-rich-quick kind of thing." sidebar: USE BULLETSGetting StartedTalk to friends about starting an investment club. Usually, clubs are groups of people who have something in common, either a Saturday tennis game or a love of movies. If you don't have friends interested in starting a club, put a small notice in the paper and see if the response is good.Members must be required to pay dues, usually about $25 per month. This money is then invested in the market.Early on, the group should choose a stock broker to help organize their affairs. Only professional stock brokers can make trades on Wall Street.The group should immediately get on a number of mailing lists, including investment guides and financial magazines. Ask your broker about which mailing lists to get on.The smaller the group, the easier it is to get a consensus on which stocks to buy. Most investment groups require their members to go along with the group's decisions on which stocks to buy; the larger the group, the more difficult it can be to win consensus.Plan to meet at least once per month to go over the group's portfolio and investment strategy.