The Investors Next Door

Trying to figure out the best movesin today's market? Listen to the strategies from members of some of the nation's leading investment clubs.

their friends, neighbors, and themselves losing positions. After 1987, we didn’t lose a lot of people down on Wall Street, but [from] 1989 — 1990, it became a little bit like a ghost town. It’s happening again.

B.E.: Do you believe we’ll see a market bottom this year?

GRAIN: I think it’s going to be a little more painful [because] 2003 is not going to be a wonderful year. [The market] may improve a little but it’s going to be slow and painful.
GREER: Clark is right. I think we’ll see a slight improvement but even if there is a drastic improvement, we are going to go through some more pain.

B.E.: So what should investors do now?

GREER: Unfortunately, Americans are into instant gratification and [they] don’t want to see that a bond price is better than [their] stock returns. You see what happened in the 1980s when we had those interest rates [as high as] 14%. Everybody was ready to forget about equities and put everything into the bond market. The reality is that all of us should have a percentage of our portfolios in bonds. That’s part of the diversification. If you’re sitting on the side, you’re going to mi
ss your opportunity.

JOHNSON: Your time horizon is so critical. We talk about five or 10 years. We talk about people saving for retirement in 20 years or [so]. If we can segregate parts of our portfolio then we [can identify] what we need in 10 years, 20 years, [or] what we can pass on to the next generation.

I recently found out that my great-great grandfather owned stock. [My family] had shares of American Home Products [now called Wyeth (NYSE: WYE)] that they sold in 1937. If [those dividends] had been reinvested, our family would have easily had a million dollars that we could use to put all the kids through college [or] give everybody a nest egg when they start out. Think about [investing] for your grandchildren’s retirement instead of buying all the Tinkertoys. With that time horizon, it makes it more comfortable to live through the day-to-day turmoil in the market right now.

PLUMP: Get started and stay focused. Get your people together and hammer it in that you’re not just doing it for them but for their children. Three years ago I didn’t even think about investing. But now, I’m thinking about my children investing. My daughter just [turned] 15. She wants to start her own investment club–at 15. If I had started my own [club] at 15, I could probably have a nice nest egg for my children. So, it’s making me think bigger. I’m not intimidated.

ZENITH INVESTMENT CLUB

Stock
(Exchange: Ticker) 
Price at
Recommendation* 
5-Year Estimated
EPS Growth Rate
Automate Data Processing (NYSE: ADP) $34.75 14.4%
Freddie Mac (NYSE: FRE) 61.01 14.4
Fannie Mae (NYSE: FNM) 73.01 13.8

MILLIONAIRES-THRU-CHRIST INVESTMENT CLUB

Stock
(Exchange: Ticker) 
Price at
Recommendation* 
5-Year Estimated
EPS Growth Rate
Procter & Gamble (NYSE: PG) $88.00 10.4%
ExxonMobil (NYSE: XOM) 32.29 9.0
Coca-Cola (NYSE: KO) 48.36 11.4

AWARENESS TO ACTION INVESTMENTS

Stock
(Exchange: Ticker) 
Price at
Recommendation* 
5-Year Estimated
EPS Growth

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