Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-03-31
Money Clubs
Have Become
All the Roqe
BY WALTER BUSSEWITZ


NEW YORK.-Four New York
couples used to get together monthly
for a social evening of bridge. aNow
they are trying to for grand slam
in blue chips"
The members of the Bridge In
vestors Cuba lawyer, advertise
ing man, two chemists and their
wives-put $25 each into stocks
monthly.
Once a month for the past three
years, another group-13 execup
tive employees of Johns Manville
Corp. and two friends-has gath
cred at New Yorks Dartmouth
College Club and talked stock mar
ket.
Members of 1.-THE Is Investment
Club" have plunked $40 apiece into
stocks each month and have plowed
back dividends to build up port
folio of $500.
Do Yourself Finonce
These are just two examples of a
do-it-yourself movement in learn
ing how capitalism works, that has
spread to thousands of communities
across the country.
Simply. an investment club is
small group of friends who get
together, usually once month, to
discuss securities and invest small
sums in stocks of their choice.
The New York Stock Exchange
says there are roughly 10000 in
veStment clubs with a membership
of more than 100000.
The combined holdings of the
clubs add up to many millions Of
dollars worth of stock, according
to market studies.
Ruddick C. Lawrence, vice presi-
dent of the New York Stock Ex-
change, says, "the clubs have spread
largely by word-of mouth, feeding
on the increased interest in peri
odic investing, especially for retire.
ment. and on the strong social flavor
Of their makeup.
Almost all these clubs have
something in common beyond a
desire to learn about investing
jobs, neighborhoods, clubs, some
thing"
For example, New York's FL
nest" investment club is made up
of policemen. The Katahdin In
veStment Club in Maine consists
of men who go hunting together.
The Women's Investment Trust is
limited to women workers on the
payroll of Detroit Edison Co. and
the Cooperative Investment. Club
is a group of neighbors in Prince
ton, N. j.
How It Works
Here is how the typical invest
ment club works: Membership gen.
orally is limited to from 10 to Is,
with each contributing $40 month.
Stock usually is bought in the
name of the clubs treasurer
rather than in the clubs name.
Some clubs prefer to use two agents
to receive the protection of a two
name account. A monthly record
is kept of the liquidating value of
each member.
Each is responsible for maintain
ing up-to-date files on individual
companies. Members are assigned
to study available information on
these companies and then report
at the clubs monthly meeting,
which decides by majority vote
the stocks to be held and those to
be sold.
The Mutual Investment Club OF
Detroit. regarded as a pioneer in
the modern era of clubs, has fol-
lowed three ruleS-it invests $40
per member each month. reinvests
all dividends and tries to buy only
stocks of so-called growth" COM
panies.
This club was started in 1910 by
six young men who had Just fin
ished college. 1t showed no profit
for the first three years but in the
fourth year its assets had nearly
doubled.
At last report, the club had in
creased from 6 to 16 men and its
holdings were worth $4,000. Here
is breakdown: Payments by men,
bers. S26,000 reinvested dividends,
S15,475; reinvested profits S19.006:
and Withdrawals, $22.270-a total
liquidation value of $85,00l.
Hord TO Replace Members
AT the New York Offices of West
Virginia Pulp g. Paper Co., 20 en-
ployes set up an investment club
two and one-half years ago, started
out contributing $50 each month
and later went to $50.
The club disbanded recently when
membership had dwindled to eight.
I'VE found" says a spokesman
for the group. that when a menu
Der liquidated his holdings to buy
a house or because of a transfer,
1t was next to impossible to get a
new member because the cost was
too great.
THE eight who stuck to the end
MADE a Is per cent return on their
investment despite the recent dip
in the market. At the end of the
first year, We had an almost Is
per cent return on investments
made up to that time"
One of the potential pitfalls of
the clubs is the problem of what
to do about bringing in new mem
bers when there are designations.
Some clubs get around this prob
lem by employing per share basis.