Investing in brand names: your favorite products can pump up your portfolio's performance. (Investment Clubhouse).
If your investment club has new parents who just love Huggies diapers, you may want to look into Kimberly-Clark, which owns the No. 1 diaper brand in the United States. Kimberly-Clark is also the world's top provider of personal care, paper, and consumer products, including Kleenex, Cottonelle, and Scott brands of facial tissue, bathroom tissue, and paper towels, respectively.
Equally, no Saturday afternoon would be complete for some families without a trip to the mall, and later, a fast-food pit stop. So, it's fitting that many club members are eager shoppers at, and investors in, McDonald's and the Gap. According to the National Association of Investors Corp. Top 100 listing of the most popularly held stocks among investment clubs and their members nationwide in 1999, other club favorites include Intel, Pepsi, Motorola, Home Depot, Microsoft, Disney, MCI, Compaq, Gillette, and Pfizer.
Often, those companies that are market leaders offer growing income and earnings per share for savvy investors. And why not? Year in and year out, consumers reach first for those household names that they know and love, even if those products come at a premium price.
Club members should start looking around them -- say, your bathroom, kitchen cupboards, refrigerator, and clothes closet. The products that fill your homes, and the corporations that provide services that your families can't do without, yield great investment ideas.
"The question on everyone's mind when we started out was `How do you know when and what to buy?' I told people to research something that they have an interest in or a product that they use," explains Carolyn Williams-Robinson, president of Investors 2000 Plus, a club made up of men and women from Richmond, Virginia.
Hershey is one of Investor 2000's picks, thanks to one member's fondness for chocolate candies. Another member was a big Wal-Mart shopper, a major group holding. The group's portfolio has 10 holdings, including J.C. Penney, Intel, Evergreen Utility, Disney, Hannaford, Dupont, AFLAC, and Wendy's. (The group owned significant shares in BET before it reverted to a private entity.)
The 6 year-old group set a one-year timetable before buying its first stock, America's Utility Fund (offered by their local utility company). "We noticed, in our bills, an offering to buy into this mutual fund," says Williams-Robinson. A team of members researched the fund and presented their findings. The group voted in favor of investing.
The 15-member club ranges in age from 30 to 50, with diverse backgrounds, from nurses to bankers. In addition to a combined compound annual return of 70% for 1996 and 1997, the group's youth and community advocacy was a factor in the Coalition of Black Investor's selection of Investors 2000 Plus as Investment Club of the Year in 1998.
Club organizers, including Williams-Robinson, say that searching for companies among the places, products, and services that folks use everyday will make it easier and more appealing for members to do the necessary research. Plus, members have a chance to help increase the value of the club's portfolio over time.
Top 10 Stocks Held by Clubs Company Ticker Number of Clubs Holding Stock Cisco Systems Nasdaq: CSCO 15,480 Intel Corp. Nasdaq: INTC 15,083 Lucent Technologies NYSE: LU 13,460 Home Depot Inc. NYSE: HD 11,627 Microsoft Corp. Nasdaq: MSFT 11,178 Pfizer Inc. NYSE: PFE 10,581 General Electric NYSE: GE 9,774 Avaya Inc. NYSE: AV 9,481 Merck & Co. NYSE: MRK 8,239 AFLAC NYSE: AFL 7,204 SOURCE: NATIONAL ASSOCIATION OF INVESTORS CORP.
Excerpted from The Millionaires' Club: How To Start & Run Your Own Investment Club--And Make Your Money Grow! Copyright[c] 2001 by Carolyn M. Brown. All rights reserved. Reprinted by arrangement with John Wiley & Sons Inc.
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|Author:||Brown, Carolyn M.|
|Article Type:||Brief Article|
|Date:||Feb 1, 2002|
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