It has been a tough market for the small investor. Some don’t even bother to open their quarterly 401(k) statements, frustrated by their eroding nest eggs. Moreover, investor confidence has not been revived by Senate hearings on shabby corporate accounting practices or handcuffed execs doing a “perp” walk before television cameras. Not even President George W. Bush or Fed chairman and market oracle Alan Greenspan has had any effect on a market noted for sucker rallies and false bottoms.
We have assembled what we call “the investors next door”–individuals who seek to build wealth through investment clubs. They represent top stock-pickers from leading investment clubs: Bernadette Johnson, past president of the Raleigh-Durham, North Carolina-area-based Black Women Investment Corp., a 13-year-old organization comprised of black women between the ages of 30 and 55; Marcus Plump, chairman of Millionaires-Thru-Christ Investment Club, an 18-month-old club whose working-class members belong to Salem Baptist Church in Chicago; Okorie Ramsey, treasurer of the San Francisco-based investment club Awareness To Action Investments (ATAI), an organization mostly comprised of members of the National Association of Black Accountants; Clark Grain, treasurer of the 19-year-old Zenith Investment Club in Framingham, Massachusetts; and Baunita Greer, a director of the New York chapter of the National Association of Investors Corp. (NAIC), an organization that helps develop investment clubs and a member of New York-based CMG Investment Club, which is composed of several professionals. Our editorial team discussed with them their strategies for collective and individual wealth building.
BLACK ENTERPRISE: How do your members feel about investing in this tough environment and have they been able to maintain their financial commitment to investing?
OKORIE RAMSEY: As accountants, we are very positive about the market and what it can do. We’ve seen the downs and the ups. Actually, I would say that our financial commitment is stronger. As far as the impact of the market on our investments, we’ve probably lost about 20% of our initial investment from inception. But we believe this is a time to buy the right stock. You shouldn’t just buy anything. They’re all cheap right now. By knowing where these companies can go and [by] doing the research, you can still find good deals and get a good return.
MARCUS PLUMP: Our commitment has kind of fallen off a bit. The treasurer and I have had to be motivators because we’re working people and what we put in could affect whether someone is going to eat. Basically, we’ve had to inform [our members] that right now is the best time to buy.
B.E.: Has your membership held steady?
PLUMP: We were up to 18 members. We went down to about eight, but now we’re back up to about 12. We’re a God-based club and we’re looking at Proverbs 13:22, where a wise man leaves an inheritance to his children’s children. That’s why we started [the club]. If my grandfather had left me a quarter of a million dollars, would I be in the same situation that I’m in right now? We have let [members]