Each one, teach one.

Overseas clubs are bringing everyone along for the bull ride

The growth of African American investment clubs isn't restricted to the U.S. In fact, there are a growing number of such clubs spanning the globe, looking for profitable opportunities and teaching their members' offspring about the value of compounding interest.

The Investment Club Learning Centre Inc. (ICLC), of Canada, and the M&M (Money & More) Investment Club of Frankfurt, Germans are preaching what they practice. Situated almost 5,000 miles apart, their missions coincide: educate children and the community about investing.

"ICLC is designed to support clubs across Canada through workshops, quarterly newsletters and consultations with team members for the company," says President Paul Barnett, owner, whose organization is a support group for new, old, struggling and well-established investment clubs. In addition, Barnett is a member of two investment clubs, one for the past 18 years.

ICLC's mission is "to help educate the public on investing as a whole and make sure when they do invest, they know what to do with it," says Barnett, who expects his start-up venture to generate revenues of nearly $60,000 this year.

The M&M club got its start in May 1996. Most of its members are Department of Defense educators. With retirement looming for some--members range from 36- to 65-years-old--the 18 members knew it was time. "We're comparatively old in getting started, but we didn't have the resources in the early years," says James Lynch, 58, spokesperson and club member. "We found ourselves in a predicament--many of us will be retiring in the next five to six years--so we wanted to begin generating wealth for retirement." Now, each unit (single person or family) invests $100 per month. Since May 1996, their portfolio has grown from around $40,000 to $70,000 as of January 2000. So what's the secret of their success? "The bull market and having a good balance of stocks," says William Harvin, 43, club treasurer. "Because of the initial [earning curve, we based the portfolio on blue chips, but we need to add some [more] technology because of the potential growth in that sector."

While tech holdings like Microsoft (Nasdaq: MSFT) and MCI WorldCom (Nasdaq: WCOM) are doing well, Wal-Mart (NYSE: WMT) leads the pack among the club's holdings with 200 shares, representing almost 20% of its portfolio. "Wal-Mart is becoming international. Stores like it are taking on an American flavor," says Lynch. "The Germans love it because of the variety and its products are generally cheaper" compared to Germany's cost of living, which may be up to 20% higher than in the States. In addition, Merck (NYSE: MRK), Motorola (NYSE: MOT), General Electric (NYSE: GE) and Sara Lee (NYSE: SLE) are among the club's other major holdings.

To make sure the next generation takes part in the market, M&M club members give stock to high school and college graduates. "We're trying to educate them early, because we know had we started earlier, many of us would be well off financially," says Lynch. They try to get the kids to buy what they know and do their own research, he adds.

ICLC charges members $99 and nonmembers $125, plus a $75 subscription fee. Included are two consultation visits to your club or two general sessions at a seminar, a quarterly newsletter and up-to-date information about changes in the tax code, how to maintain your club and how to analyze your portfolio.

Thus far, ICLC has five participating clubs and projects it will expand to 75 by the end of the year. As of November 1999, the participants' average annual growth was 15% to 19%, with a portfolio average of $50,000. About a third of the clubs' members are minorities.

ICLC monitors club performance, but it never makes or suggests stock picks. ICLC sees itself as a helping hand to its clients, as does the NAIC (National Association of Investment Cos.), a similar organization in the U.S.

Both M&M and ICLC see long-term growth as their investment goals, filling both their coffers and yours.