The May issue cover story of BetterInvesting Magazine explores how several longtime clubs have maintained their focus on building long-term wealth despite a stock market that hasn’t always cooperated in recent times. We hope the lessons these clubs provide can offer some inspiration and ideas for clubs that face the struggles that are inevitable for every long-term partnership.
Several common themes run through the article, all of which are consistent with our experience in speaking with successful clubs over the years. The hallmarks of many successful clubs are:
- Following the discipline provided by the Stock Selection Guide and BetterInvesting principles of reinvesting earnings and dividends as well as investing regularly no matter what the market is doing.
- Having strong leadership, mentors who can provide guidance, or both. Many BetterInvesting chapters offer club visits; we recommend all clubs affiliated with these chapters consider contacting a chapter volunteer to talk about any portfolio or operations issues.
- Mandating participation of all the members, including ensuring that all members are completing SSGs and taking part in meetings. Many of the healthiest clubs rotate leadership positions and stock assignments as well as have succession plans for the critical club treasurer role.
Clubs that stuck it out through the lean years likely have had solid returns in recent times. On a total return basis that includes reinvested dividends, the BetterInvesting 100 Index, or BIXX, increased 10.5 percent annually for the five years ended Feb. 28. Perseverance pays off in the long run.
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was born out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks and mutual funds, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at http://www.betterinvesting.org/investing/landing/openhouse/blog/index.html or call toll free (877) 275-6242.