Investment Club Scores Gains, Has Fun

by Mark Friedman  on Monday, Jun. 23, 2014 12:00 am  

The investment club started trading in 2011. Some of its central Arkansas members include, from left, Vernon Scott, Scott Schuldt, Daniel Robinson, Lee Welfel, Dr. Cole Brucker and Matt Black. | (Photo by Jason Burt)

As an original member of the investment club Junto Investments, Daniel Robinson of Little Rock lobbied for the group to buy shares of Netflix Inc. when it was trading at around $50 in July 2012.

“There was a couple of us that wanted to buy in and a couple of us that didn’t,” Robinson said. “It effectively was a split decision.”

When the issue came to a vote, the nays eked out a victory.

“And we never bought it, and since then it’s gone from $50 to $350,” said Robinson, who must have quit checking. As of last week, Netflix actually was trading at $430 a share.

Despite that missed opportunity, the club, co-founded by Lee Welfel of Maumelle, a vice president at Delta Trust Mortgage Inc., posted a 39 percent return on its investments in 2013. Starting with $4,000, Junto Investments has grown its value to about $75,000.

Welfel and a childhood friend, Tommy Gonwa of St. Louis, formed the group in 2011, at a time when investment clubs were vanishing across the country.

At the high point, investment clubs had more than 467,000 members nationwide, according to BetterInvesting of Madison Heights, Michigan. Now there are around 45,000 members, it said.

Adam Ritt, a spokesman for BetterInvesting, said last week that one of the reasons for the decline in members is that people just aren’t joining clubs as much as they did years ago. In addition, the Internet has made it easier to find and share information about companies to invest in, he said.

While there has been a slight uptick in the number of clubs that formed this year over last year, BetterInvesting will probably never see the numbers of the 1990s, Ritt said.

“It’s still a great way to educate investors,” he said.

A Nod to Ben Franklin

Welfel said he and his childhood friend thought forming an investment club “would be a fun way to share investment ideas.”



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