Stocks "R" us.

Investing in the market is no play thing for this teen club

The Rock, Stone Cold, and Triple H are stars of the World Wrestling Federation (Nasdaq: WWF) with magnetic drawing power. So much so, that WWF is a popular stock among the members of the Future Moneymakers Youth Investment Club. The group of 22 enthusiastic investors range in age from 7 to 19, and each pays $10 in monthly dues to invest in a half dozen stocks.

Characteristic of the "Net" generation, the Future Moneymakers also heavily favor tech companies, such as Intel (Nasdaq: INTC), Cisco (Nasdaq: CSCO), and Microsoft (Nasdaq: MSFT). However, the young members are now looking to diversify, especially after the beating the technology sector took in 2000. Their portfolio, valued at around $4,500, suffered a 37% loss for the year as of January 2001.

The Future Moneymakers are part of a growing movement in youth clubs. The current youth membership of Madison Heights, Michigan-based National Association of Investors Corp. (NAIC) is 3,400. But there are many more young investors out there that go uncounted, says Jeffery D. Fox, NAIC director of education, mainly because they are part of family-run investment clubs.

The Future Moneymakers formed in 1998 as an outgrowth of National Tots and Teens Inc., a 50-year-old nationwide network of African American families, which develops programs to help foster leadership skills. However, it was the parents of the Prince Georges County, Maryland, chapter of Tots and Teens that came up with the idea of starting an investment club as a part of their financial literacy program.

Some of the 17 parents (a.k.a. sponsors) make up a steering committee, which meets quarterly and is responsible for providing investment education and sponsoring field trips to such places as the New York Stock Exchange and Federal Reserve Building. Since members are too young to buy stock themselves, their parents, who handle the administrative duties, had to sign custodial agreements with the investment club. The youth don't end up owning shares until they turn 18. Still, the kids call the shots by running the meetings and making all decisions about investments.

Club members analyze and track stocks using various resources, including the NAIC's Stock Check List and Value Line Investment Survey. Over the course of the year, members are responsible for analyzing two to three companies, preparing reports on their stocks, and presenting their findings to the group. As with adult clubs, they must make recommendations on whether to buy, hold, or sell their holdings.

Members look for companies with a minimum of 14% annual sales and earnings growth. They also compare historical P/E (price-to-earnings) ratios with current ones to make sure they aren't paying too high a price for any stock. The bottom line: "Is it a company that has the potential to make money?" says Jason A. Harris, the club's 16-year-old president, who uses his allowance as part of his club dues. Harris, a junior at Dematha High School in Hyattsville, Maryland, and a member of the soccer team, has been tracking Intel and BIFS Technologies (OTC: BIFT), a water system and wireless company.

Membership in the Future Moneymakers is open to youth on a limited basis. The requirements are that they must commit to stay with the club at least one year and actively participate. Says sponsor Rosalyn L. Wilcots, whose sons, Darius, 11, and Jared, 8, are also members: "We are encouraging all of the Tots and Teens chapters (12 altogether) to sponsor programs to help their children manage money and to become better consumers?

FUTURE MONEYMAKER'S TOP FIVE HOLDINGS

Company         Exchange/Symbol   Portfolio Weighting

Microsoft       (Nasdaq: MSFT)            18%
Cisco Systems   (Nasdaq: CSCO)            16
Intel           (Nasdaq: INTC)            14
UPS             (NYSE:UPS)                12
WWF             (NYSE:WWF)                 7