Is there strength — and profit — in numbers? Thousands of INVESTMENT CLUB members think so. Though membership in the nonprofit National Association of Investors Corporation (NAIC) has shrunk thanks to recent rough markets, it still boasts 298,000 members in 29,000 clubs around the country. According to the NAIC (www.better-investing.org), the estimated total of all NAIC members’ portfolios runs to more than $100 billion. Each club pays $40 annual dues, plus $14 for each member.
NAIC Chairman Kenneth S. Janke says that through boom and bust, the 52-year-old nonprofit association’s mission remains the same: educating investors about a conservative, buy-and-hold philosophy. “Our typical investor holds a stock about six years,” Janke says. “During the tech bubble, some of our people got caught up in the euphoria of momentum investing, but now it’s back to fundamentals.”
One NAIC club member who never chased the dot-coms is Joe Smith, a retired marketing executive in New Jersey. Founded in 1967, Smith’s club has posted annual growth rates ranging from 16 percent to 22 percent — nicely outpacing the S&P 500.
“We follow the NAIC way religiously,” Smith says. “We buy good companies we understand, and when the market goes down, we buy more of those companies. If the fundamentals of the company are the same, why sell just because the price goes down?”