By Jennie Zeitler
The Lakes Area Investment Club, which includes members in the area surrounding Albany, has beaten all odds to celebrate 20 years of successful stock market investing.
“The club was born Jan. 1, 1994, with 22 members,” said Roger Majeski, club president. “We come from all walks of life.”
With an initial contribution of $100 each, the club bought 80 shares of Wal-mart stock. Their investment earned 7 percent the first month.
“Eighty percent of investment clubs don’t last 18 months,” Majeski said. “For us to service this long — it’s because of the compatibility of the members. You have to have like-minded members.”
The club members agreed that they were not going to be trading stock. They would only sell when people left the club.
One thing that prompted the club’s formation was the inspiration of a group of women called the “Beardstown Ladies.” They got the country’s attention after writing a best-selling book about their experiences investing. Publicity for the book included appearances on the Today Show and Phil Donahue.
Although the Lakes Area Investment Club began by using the services of a full-service broker, they later switched to Scottrade.
“We are very pleased with them,” Majeski said. “They have a great financial website and transactions only cost us $7.”
The club’s current portfolio value is more than $350,000.
“We have also paid out more than a quarter million to withdrawing members,” said Majeski.
The club lost a number of people during the housing crisis.
“The economy knocked people out,” Majeski said. “They just needed the money; that’s all there is to it.”
But it’s the people who stick with it who reap the rewards. The club’s rate of return is 12.28 percent.
“The more research I do — I see that our return is remarkable,” said Majeski. “We have beat Standard and Poor’s 20-year annual return of 9 percent.”
Over the years, the club has invested more than $7,300 in Polaris stock. During that time, members have received $7,100 in dividends alone, which has all been reinvested.
“We’ve sold $44,000 worth of stock when people have left, but the club still owns more than $50,000 in stock,” Majeski said. “It’s a total cash cow.”
Even though the market goes down, it doesn’t bother the club members in the least.
“We know the market always fluctuates,” Majeski said. “The people who lose money are the ones who panic and sell. After 9-11, after 2003 and 2008, the market came back with a vengeance.”
Club members contribute a minimum of $30 each and every month, year in and year out.
“We buy the stock, we hang onto it,” said Majeski. “We hit highs; we hit lows. After time it averages out.”
Majeski points out statistics that prove trying to time the market doesn’t work, repeating a well-known phrase, “‘Never try to catch a falling knife.’ A long-term philosophy is much safer and also much less stressful,” he said.
The club’s one bad investment in 20 years was stock in Washington Mutual, the country’s largest bank. In September 2008, the bank was ordered closed and the assets sold.
“We have survived the tech bubble implosion in 1999-2000, the 9-11-2001 attack, the Enron crisis in 2003 and the housing bubble implosion of 2008,” Majeski said. “We are like a Timex — we take a licking and keep on ticking!”
In 2013, the club received more than $6,500 in dividends from its combined holdings.
“I firmly believe that investment clubs provide a great opportunity for people to learn a little about the stock market — especially younger people,” said Majeski. “I wish I’d started this 20 years earlier.”
Nine of the original members remain, for a current club membership of 17.
Majeski welcomes contact from anyone interested in joining the club or starting their own club. The Lakes Area club meets monthly at the Hillcrest Restaurant in Albany. For more information, call (320) 241-2242.