Interactive Investor

Lessons from an all-female investment club

17th April 2018 15:49

Moira O'Neill from interactive investor

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If you fancy dipping your toe in the stock market but would rather not do it alone, then why not set up an investment club? This is exactly what these 10 women have done. Moira O’Neill met them to find out more.

In July 1999, a group of 10 women working along the beautiful Yorkshire coast, with no connection to the world of finance, decided to form a share club.

They were all used to making decisions as professionals in education and managing their own finances, particularly with an eye on future retirement. They felt confident in committing a relatively small amount of money to buying and selling shares directly on the stock market, and learning a bit more about the world of business.

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The 400 Investment Club was born and is still going strong today.

Members each paid in an initial £100 and set up direct debits for further monthly payments. They reached their agreed total investment per member of £1,000 in 2002. They receive a small payout each Christmas and, by 2012, each member had received their initial investment back in payouts. They are now enjoying real profits.

The club has 10 members, nine from Yorkshire and one based in London. Eight of them have been together from day one. Members take turns to have meetings in each other’s home, sometimes travelling miles each way to attend.

To find out what they have learnt from more than 100 meetings over 18 years, I travelled to Bridlington in Yorkshire to see a meeting in action.

Marjorie Sutcliffe, co-founder and treasurer, is a retired teacher. Marjorie says: “We found each other through work. Sue and I had our own portfolios with Barclays Stockbrokers. We used to talk about it at lunch and people got interested. I’m from a farming background. I’ve always been aware of money and careful with money. 

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“We’re all professional women who have made our own money and bought our houses. Seven of us are single women. A few have children and grandchildren. Every 18 months, the meeting is held at your own house,” she explains.

“You don’t want someone coming along for the ride. It must feel like a genuine decision. Trading is important. It’s important not to get attached.”

THE MEETING

Marjorie begins with an account of transactions based on decisions at the previous meeting. She has sold 47 United Utilities shares, raising £402.55 – a 22% profit on the purchase price. But they still have 56 shares left in United Utilities. The club has had a good two months for dividends and is still getting 4% dividend income.

They discuss that the big change in the portfolio has been Fever Tree, a producer of premium drink mixers that has reached 60% profit on the price they bought it for. Club member Wendy says: “I’ve just came back from Crete and it was the only tonic served.”

Members then discuss their investment in fertiliser development firm Sirius Minerals, which is of particular interest as its York Potash project is in their local area.

Shirley says: “There was even a Sirus van down my drive. Is it a sign of a turning point?” They conclude that its price has drifted, but they’re not concerned.

Babcock, which provides skilled, bespoke engineering services, is their big loss in the portfolio.

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Marjorie says: “It’s a slightly unfashionable sector, but its news is consistently promising. I think we should hold on to it. It’s a very important company in this country.”

The investment discussion then moves onto the topic of the £600 that the club has to spend on investments. Several members have been investigating opportunities.

Jennie offers her thoughts on Michelmersh Bricks, which produces clay bricks, tiles and pavers. “It’s very good and doing well in a niche market. It also buys up cheap land and fills it with landfill and sells it on,” she explains.

Pamela has been looking at Merlin Entertainments. “It’s mega successful and second behind Disney in visitor attraction operators,” she says. “I think there will be a lot more ‘staycations’ (with one or two special days out) because of Brexit. It offers a good deal on an annual pass for two adults and two children.”

Julie has looked at the storage and warehouse sector, finding a fairly new investment called the Warehouse Reit.

She says: “I do much more online shopping than ever, so I think it’s worth doing.”

Shirley has been looking into opportunities in Drones and 3D printing, but concluded: “The biggest companies are not here – they are in China.”

Sue has been looking into Pets at Home, which has 434 stores. “The target is 500 and it is opening grooming practices in store at a rate of 50 a year,” she says. “It also does its own brand of dog food – it’s the best-value dog food for 2017. But part of me thinks we should have bought it a year ago.”

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Now it’s time to vote on the investments. Marjorie proposes the Warehouse Reit, with Wendy seconding. Pamela proposes Pets at Home, with Sue seconding.

The club votes a 60/40 split between the two, with the Warehouse Reit getting the larger share. And then it’s on to the social calendar.

HELPING YOU TO GET STARTED

If you would like to set up a share club, here are some useful websites:

Proshareclubs.co.uk Free guidance on starting and running an investment club. Plus, register your club’s details for free and receive a monthly email newsletter.

Share.com/investment-accounts/investment-club-account Investment platform the Share Centre offers an Investment Club account designed to make investing in the stock market quick and easy. Charges apply.

Hl.co.uk/investment-services/fund-and-share-account/faqs Investment platform Hargreaves Lansdown offers investment club accounts, but you need to apply by post. For more information, call 0117 900 9000. Charges apply.

Gov.uk/tax-sell-shares/investment-clubs Explanation of how to work out your gain differently if you’ve bought and sold shares through an investment club.

MEMBERS’ COMMENTS

Jennie: “Becoming a member of this club is one of the best things I’ve ever done.”

Pamela: “The club has helped me plan and make my own decisions about my financial future.”

Gill: “Our diversity as individuals – and respect and liking for each other – enables us to see each other’s points of view and make measured, collective judgments.”

Julie: “The club is still in business as we are a group of people who are committed and reliable in our financial dealings – and true friends I can rely on, trust and look forward to meeting every two months.”

This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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