Cherry Pickers, a tale of a local investment club

on Friday, 04 June 2010. Posted in N21 Community




The first Friday evening of the month is the night when the Cherry Pickers Investment Club get together.

The club formed three years ago comprises a dozen people living around Winchmore Hill and Southgate, including three couples. Two people have left to be replaced by two more during the life of the club.


We are a properly formed club, with a constitution, Chairman and Treasurer who is responsible for transacting our deals. We use a model constitution taken from a manual called "Proshare Investment Clubs", which runs the National Register of Investment Clubs). Our deals are transacted through The Share Centre, which caters for small investment clubs such as ours in terms of buying and selling and providing information and market analysis.

We each put in £25 a month into our investment fund, a grand total of £300 of new money to invest. Our portfolio is small, so that we don’t incur too many dealing charges and currently we have shares in eleven companies and we review our portfolio every month.

Each Investment Club member takes responsibility for a sector, researching potential investment opportunities as well as the overall performance of the sector.  Our investment strategy isn’t sophisticated, we tend to look for shares that are currently trading at a lower price, but have potential to rise, also companies with good dividend records – buy low and sell high is the theory. We try to get out of a stock at the high point, before it starts to fall, thus taking a profit, not necessarily at the top of the market.

We read the financial press for investment advice on Buys, Sells and Holds and can check out the performance of companies on the Share Centre website. We aren’t experts (although we do have one stockbroker in our Club) but very soon looking at charts, talking about high, lows, PE ratios, yields and dividends becomes second nature, although the knowledge and expertise (of most of us) is wafer thin!

We hold a mix of blue chips and emerging companies, in the last year we have been more conservative and some months we have held cash and not spent our kitty. So how have we done? The last month has been difficult, some of our blue chips have been weaker, but we are up overall, over the longer timescale. We have had some disasters and our star performer was actually a stock we bought by mistake, because someone misspelt the name!


It’s fun, sociable, usually fuelled by a few bottles of red wine and is a great way of investing a small amount of money, but not a great way to get rich. Apparently around 40% of investment clubs are based in pubs and true to form, the Cherry Pickers began life in the Cherry Tree on Southgate Green! Is hobby investing, but it has been rewarding in other ways, getting to know new people and becoming (a little) more knowledgeable about the workings of the Stock Market (which still appears to me to be another form of gambling!).


There’s plenty of information on the Internet about how to set up an investment club, The Share Centre and ProShare manage the portfolios of hundreds of small investment clubs like The Cherry Pickers.  ProShare even offers an investment club ‘dating service’ to put people looking to join an investment club in touch with each other in the same area.

Alternatively you could always advertise for potential members on n21online.com.

Join in on an upward trend, although we won't be linking to the FTSE just yet.

 

http://www.share.com/

http://www.proshareclubs.co.uk/

http://www.hmrc.gov.uk/cgt/investment_clubsfaqs.htm

The first Friday evening of the month is the night when the Cherry Pickers Investment Club get together

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