You’re never too young

Investment clubs help teens conquer the world of stocks

The stock market is kid stuff for the S.G. Junior In,vestment Club (SGJIC). That s because the group, made up mainly of boys and girls who belong to St. George’s Episcopal church in northwest Washington, D.C., is busy dissecting annual reports and investing trends whenever members aren’t busy with Bible studies or prayer meetings.

Currently 14 industrious kids, from 11-18 years of age, belong to SGJIC, with five adult sponsors as chaperones. And besides the currently active members, t 1 “alumni” who’ve graduated from high school and moved on to college are still enthusiastic enough to send in dues each month.

Today, there are dozens of youth-run investment clubs across the country. In fact, about 10% of the membership of the National Association of Investors Corp. (NAIC), the Madison Heights, Michigan, organization that tracks investment club activity, is. under the age of 30.

That’s a marked change from past perceptions of teens as notoriously big spenders. Kids ages 12-19 have more money at their disposal than their parents did at the same age. Statistics from Teenage Research Unlimited, a consumer research company in Northbrook, Illinois, show that teens pump some $122 billion into the economy via soft drinks, CDs, fast food, clothes, movies and athletic footwear,

But a growing number of adolescents believe they should expend as much effort investing money as they do throwing wads of dollar bills at a variety of consumer items. SGJIC’s former president, a 19-year-old college sophomore named Michele Campbell, whose twin sister, Renee, was the dub’s vice president, says it’s important to learn to grow money instead of shoveling it into goods that lose value over time. “[Kids] can save their money to help buy a car down the road or help their parents send them to school,” she says.

Why are youth investment clubs popping up? For one, they’re quite easy to set up. Essentially, they’re organized and run the same way as any other club is. They must choose members, select officers, set a date for meetings and collect monthly dues. They need to open a brokerage and bank account, write bylaws and form a legal partnership. The only real difference is that parents have to sign custodial agreements with the partnership, since members are too young to buy stocks on their own. That way, junior members don’t end up owning shares until they turn 18.

SGJIC started in January 1996 with an initial investment of $750, pooled from a $50 initial investment anted up by its 15 original members. Since then, thanks to a roaring bull market, the club has built a portfolio valued at $9,200, with holdings in 14 companies including Nike, Coca-Cola, America Online, Kmart; Staples and Reebok.

SCJIC meets once a month in the basement of the church. Members pay $5 minimum monthly dues. The club has several objectives: first off, it aims to realize an annual return of 15% or better. On a purely educational level, it seeks to help members learn the principles of economics and money management, pick up a basic

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