Learning to Invest
Madras women's investment club weathers the ups and downs of the stock market
It's been seven years of stock market ups and downs, but the "97 Corridor Investment Group," made up of Madras-area women, has no intention of giving up.
"It's been interesting in the downturn, but we're in it for the long haul. That's our motto," said member Mary K. Irwin.
The investment club began in 1997 after Lillian January spent the weekend at the coast with a friend of hers from California.
"She told me about the investment club she was in and I was fascinated by it. And I began thinking I had friends that might want to be in a club," January said.
Shortly afterward, she ran across an article in Good Housekeeping Magazine on a book called "Beardstown Ladies Common-Sense Investment Guide," which told how a group of women had taught themselves how to pick winning stocks.
January got a copy of the book, which contained instructions on how to start your own group.
"I started telling people I thought might be interested, and we wound up with 14 at the first meeting in September (1997) held at my house, and all but one joined," she related.
The group officially filed with the state under the name of 97 Corridor Investment Group, joined the National Association of Investors Corporation (NAIC), and drew up a partnership agreement. Officers were elected, but in an investment group they carry different titles. Currently, January is the senior partner (president), Sara Thomas is the junior partner (vice president and educator), Christy Abbe the recording partner (secretary), and Julie Hathaway, who has an accounting degree, is the financial partner (treasurer).
They decided to stick with an all-women's group, January said, explaining," For one reason or another, many women find themselves single in later years and they need to know how to handle their finances."
That was the case with Mary K. Irwin, who was one of the charter members. "After my husband died, I needed help understanding the financial world. The club has given me the confidence to handle my own investments and better understand what financial investors are talking about," Irwin said.
Limiting their membership to 15 partners, the women pay an initial contribution of $100 when they join, and monthly dues of $50. They also chip in $3.33 each to pay the monthly dues for financial partner Hathaway, since she has to keep the books and do all the buying and selling of stock. Whenever there is a membership change, the whole group has to approve the new person.
The club deals only in stocks and its first purchase of Costco and Starbucks stock was made in December 1997. Before purchases are made, members are assigned different stocks to track and report on at the monthly meetings.
"We had a broker for a while, but we had some bum steers, so now we buy everything through AmeriTrade, an on-line trading company," January said.
The market was climbing when they began, and for several years things looked great. In February of 1999, the club had seven stocks which cost a total of $10,554 to buy, but earned a total value of $15,328.
Then the stock market took a different turn. They lost money on Iridium, the company that launches satellites for phone companies, when it went bankrupt and they couldn't get out in time.
When they learned the ad agency InterPublic was under investigation, members quickly voted to sell that stock, and also recently sold their Bausch and Lomb stock.
"We're with everybody else. In the total stock market we're down now. But we have a couple, Starbucks and Swift Transportation (trucking company) that have continued to do well. We're kind of concerned through what the cost of gasoline will do with Swift," January said.
"We've lived through a chocolate crisis with Hershey," said member Marilyn Brown, "and when we see a Swift truck on the road we cheer because we have stock in it."
The club now has 14 stocks in its portfolio including Cisco (electronics), Yahoo, Wal-Mart, Sysco Foods, General Electric, Hershey's, Intel, McDonald's, Home Depot, and Columbia Sportswear.
"We've tried to balance our portfolio as our group has aged," January said, indicating they've steered away from higher risk, higher profit stocks toward more stable, slower earning ones. Members range in age from their 30s to 60s, and some work, while others are retired, she said.
But making money isn't the primary focus of the club. The object is to learn about the stock market in a fun atmosphere, and then use what they've learned in their personal financial transactions.
Dorothy Zimmerman said she knew "absolutely nothing" about financial investing when she joined the club. But over time she gained more confidence until one day, while on a trip to Corvallis, she grabbed the cell phone and ordered one share of E-bay for herself.
"Now I read the financial page and articles in the newspaper, whereas before I just ignored them. I take more interest in the economy in the country now too," Zimmerman said.
The women have enjoyed the support of learning together. Each meeting includes reports on the stocks people have been tracking and educational presentations on the market in general. Members have learned how to read the "Value Line 600" report, which lists things like stock histories, sales per share, cash flow, and projected earnings. Whenever a term crops up that they are unfamiliar with someone volunteers to investigate it, or they check "Wall Street Words," a book of financial jargon.
Through the years they've developed insight and are now using different stock evaluation tools, such as not buying a stock until it is above its 52nd week average price.
Members glean figures from the stock market pages of the "Oregonian," and even more information from the internet. There are also magazines for investment clubs like "Better Investing."
When their stocks make money, it is reinvested to build the AmeriTrade account. "We don't get payouts until somebody leaves, and then we buy them out," January noted.
The membership has fluctuated when some women moved away or got too busy to attend meetings. The group has had waiting lists in the past but currently has two vacancies to fill. Anyone interested can contact January at 475-2220 or Hathaway at 475-6570.
Things were exciting when the stock market was climbing and members thought it would go on forever. But when the market took a downturn, they voted to ride it out.
"A lot of clubs have folded. There used to be another co-ed one here in town that disbanded," January said, noting this February their totals showed $38,178 had been paid out for stocks, but the value was only $25,611. "But we also had some money in the bank," she added.
"We've had some wild rides," three-year member Marilyn Brown agreed. Brown has been tracking Starbucks for the group and said it was one of their 15 stocks that didn't take a nose-dive.
"We all went into it for the long-run and reminding ourselves of that constantly is what helped us when the market hit bottom," Brown said.