Long-Distance Stock Picking

Making things work when members move away but want to stay invested

Every investment club has to deal with members leaving from time to time, but just because people relocate, it doesn’t mean they have to leave the club. The Group I Investment Club of Greenville, South Carolina, has two members who live more than 100 miles away, yet with commitment and creative solutions, those members have continued to maintain their investments and make a vital contribution.

Rick R. Ingram Sr., treasurer for Group I, says the club started some 15 years ago when members read about investment clubs in BLACK ENTERPRISE. “We thought it would be a good idea for black men in Greenville to form investment clubs,” he says. “We use the club primarily to generate income, but we were also concerned about getting more people involved in investing and saving for retirement.”

The 15 original members of Group I each contributed lump sums ranging from $2,500 to $4,000 to start the club in October 1986. Today, the club has 12 members, each of whom pay a minimum of $62 in monthly investments, but have the flexibility to invest more as long as they do not violate the partnership agreement, which stipulates, “No member can own more than 20% of the club’s value.” As of January 2002, the club owned a portfolio of 23 stocks with total assets of $225,000. According to Ingram, Group I’s portfolio recorded gains of 64% in 1998, 10% in 1999, and 13% in 2000, before losing about 5% in 2001.

Group I’s president, Morris F. Hall, D.D.S., says all club members play an active role in helping select and monitor the stocks held within the club’s portfolio, which include: Duke Energy (NYSE: DUK), Wal-Mart (NYSE: WMT), General Electric (NYSE: GE), Home Depot (NYSE: HD), and AFLAC (NYSE: AFL). The club also has a stock selection committee. When James H. Harper and Willie B. Lloyd left (the two members who served on that committee but remained in the club), adjustments were made to make it work.

“Our stock selection committee would get together over the phone or communicate by e-mail,” says Hall. “We’re still able to discuss the stocks, and based on our research, we would make recommendations on which to purchase.”

In addition to maintaining good communication, other factors that helped Group I keep its relocated members included: They have common values (many members belong to Alpha Phi Alpha fraternity), many had known each other for years before starting the club, and they are all mature investors who average about 48 years of age.

Since Harper lives in Columbia, South Carolina, and Lloyd further away in Goodlettsville, Tennessee, members mail their investments to a post office box. Meetings are held once a month, during which the monthly investments are collected. However, late penalties for the out-of-town members are relaxed. “We have an excellent group of guys who are working together. We are not going to penalize them for staying committed to us,” says Ingram. “We want them to feel welcome because they are much needed.”

To bolster fellowship within the group,

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