[image 1] The Gow Investment Club has a distinctive approach to the stock market due, in part, to the fact that it is an all-female club. It has ten members, all of whom are based in and around Buckingham. Founder Geraldine Puxty explains that the club came into being for reasons that will be familiar to many investment club veterans.

‘Initially, setting up the club gave us an excuse to meet down the pub every month,’ she says. ‘But that said, so far we have made £700 each from our £25-a-month investments. This is all profit as we wouldn’t have saved £25 in a savings account if we weren’t in a club.’

And that is also not taking into account the potential for growth from stock market investment that goes well beyond the rates of return available from a typical savings account.

Getting involved

All of the club’s members admit to having very little experience of investment when they started. However, the spark that ignited the idea for the Gow Investment Club came from Puxty’s 92-year-old father. He read an article in the local paper about a group of women who had clubbed together to invest in the stock market and had performed very well. She recalls, ‘He said to me: “If they can do it, why can’t you?”’

She adds, ‘My friends were initially against the idea, saying: “Oh, it’s money and we’re not investment experts – we’ll definitely lose it.”’ But the subject came under discussion again at a New Year’s Eve party and they decided that if they all clubbed together the risk would be minimised and they may even have some fun.

Puxty explains, ‘We have always had ten members in the club and we are all either friends or friends-of-friends, so we get on very well. As there is money involved, it is important to know the people you are investing with. We started with the principle of investing just £25 a month – something we have stuck to ever since. We now have a waiting list for new members, but we are keen to limit the numbers to ten.’

Female intuition

The ladies of the Gow Investment Club have been investing for three years. The members are a mixture of retirees and those still working, but one thing that they all pride themselves on is making their own decisions.

Clearly, being an all-female group sets them apart from many investment clubs, and Puxty points out, ‘We are totally independent from our husbands when making investment decisions. However, they start to take notice when our decisions make money!’

And she agrees that ‘It is unusual being in an all-female investment club, and we do operate differently to other, male-dominated, clubs that I know. They tend to be made up of ex-financial directors or company treasurers and that is not our approach.’

Puxty also stresses, however, the importance of keeping yourself informed on what is going on in the market. She says, ‘I will usually check the stock market once a day. However, it is definitely no more time-consuming than any other hobby.’

Improving with experience

One experience that they have in common with many investment clubs is that their confidence has grown over time and they now feel able to take more adventurous investment decisions. Puxty reports, ‘We have become more adventurous over the years. We now invest a reasonable amount in AIM. We try to have a real mixture of investments. It is exciting to gamble on the riskier stocks but comforting to have the security of solid, reliable shares in the portfolio as well.’

Puxty points out, ‘One of our initial investments was Balfour Beattie. We did really well from it and are seriously looking to invest in it again. Lloyds TSB has also been a good share for us.’

Buy decisions are often influenced by the members’ experiences. She adds, ‘We choose to invest in companies we have either heard of or which we come into contact with in our everyday lives. For example, we invested in Primark because when I do the shopping, it is always the one shop that is packed. This share has served us very well. We have even invested in The Share Centre, which has also performed very well!’

Puxty continues, ‘We have recently bought shares in Carluccio’s, which is listed on AIM. We thought that we should spend some of our earnings by having a team night out and sample what we have actually invested in.’

Lively debate

Discussions over investment strategy can get rather lively. Puxty says that ‘Decisions about which shares to buy and sell can make for quite heated meetings. We all want to natter and have our opinion. In fact, we have moved our monthly meetings to members’ homes as we have become too loud for the pub.’

Again, in common with many clubs, they have discovered that the most difficult element in any investment strategy is deciding when to take a profit or cut a loss. She reports, ‘We do struggle when trying to decide the best time to buy and sell. The problem is deciding when to sell, not only when a share has performed badly but when it is performing well. We always talk about installing a stop-loss, but we haven’t got around to it.’

During the recent period of heightened volatility in the stock market, the ladies of the Gow Investment Club began to wish they had put the stop-loss in place. ‘We were concerned,’ admits Puxty. ‘In fact, our ex-treasurer wanted to jump out of the window when she heard about the possible crash. However, in reality we weren’t really affected and only lost about 2p each.’

This experience is another lesson learnt about markets and how to profit from them. Puxty concludes, ‘Our knowledge has come on a great deal since we started the club. However, we know we are still learning.’

You’ll find more information about investment clubs, and investing in general, on The Share Centre website, at www.share.com/clubs

This article is from the October 2007 issue of What Investment.