By Marli Guzzetta
Photography By Nathan Coe
Since the days when whalersâ wives ran Nantucketâs businesses in the absence of their husbands, island women have been ahead of the curve when it comes to assuming control over financial matters. For just over a decade now, a group of island women have been transforming the ability to run a business into the power to run a stock portfolio. Financially and otherwise, they are still performing better than their off-island peers.
Last month, the Pew Research Center released the findings of its Pew News IQ Quiz, which consisted of 12 questions authored to gauge the respondentsâ grasp of current events. The quiz addressed everything from the name of Russiaâs president to the religion of presidential candidate Mitt Romney. Although men scored more accurately on every question, the query with the biggest difference in accuracy between male and female respondents was the following:
Do you happen to know if the Dow Jones Industrial Average is currently closer to:
2,000 | 4,000 | 8,000 | 14,000?
On this question, 53% of male respondents answered correctly, compared to 29% of females. That statistic is not a fluke.
In February of this year, financial guru Suze Orman released the hardcover âWomen & Money: Owning the Power to Control Your Destiny.â In her book, Orman postulates why women are, statistically speaking, less knowledgeable regarding money than are their male counterparts: maybe they were never taught to think about finances, maybe they save that aspect of their lives as a place for rebellion or maybe theyâre just too busy.
No matter what the cause, Orman, like most financial analysts, states definitively that moneyâespecially investingâis a horribly sensitive subject for women. This is true even though over 90% of women will end up handling their own funds at some point in their lives.
Savvy investments
Nantucketâs Ten Star Investors club has consistently bucked that trend, meeting once a month in membersâ homes to discuss the stock portfolio theyâve been cultivating since March, 1996, when they affiliated with the National Association of Investment Clubs, voted in officers and bought their first stock, Nike.
The groupâs âsenior partnerâ position rotates among its members, with Daryl Westbrook, owner of Westbrook Real Estate, currently heading the group. In October of this year, the club gathered at Westbrookâs home with bottles of wine and plates of cheese and crackers. Before they settled down to business around a kitchen table strewn with Halloween candy and financials, the women sounded more like they had arrived at a party than at a meeting for crunching numbers.
âWeâre an eclectic group of women who are at different points in our lives,â summarized the groupâs historian, Ann Balas. Ten Star Investors is populated by variations of young and old, single, widowed and married, employed and retired women. Just about everyone volunteers in one form or another, serves on a local board of directors and runs a company or a home.
âIt seems that wine and cheese with an occasional winter bowl of chili accompany our investment gatherings,â added Balas. âNot only do we share our investments and education of finances, we have become friends.â
This atmosphere of friendship has been crucial for many women entering the world of finance via investment clubs. âOur investment clubs skew about sixty five percent female,â said Bonnie Reyes, president and chief operating officer of NAIC. âThatâs very much in contrast to when our organization was founded in 1951, but the trend has been for more and more women to become interested in investment clubs, because women enjoy the social setting.â
Reyes said sheâs found womenâs investment groups to be âmore socially focused. Thereâs more likely to be food and networking and more fun things involved. With men, itâs more business.â This convivial group atmosphere initially helps to demystify the process, added Reyes. âBut the main thing weâve been able to demonstrate is that you can start with as little as ten or twenty dollars a month, and you can build considerable wealth.â
Ten Star Investors did, as Reyes described, begin small. Theyâve been consistently on the right track, with only a few layovers in the early years. âSomeone looking at our early financials would have thought we were a wine club that occasionally traded stocks,â said Ten Starâs financial officer, Mary Malavese, who along with Balas was one of the groupâs original 10 members. This year especially,the group has seen the financial fruits of its labors, with its portfolio so far earning a 13% rate of return. By comparison, the highly respected Vanguard 500 index fund has earned 11% to-date.
The group has done all of its own research for the approximately 50 stocks it has owned over the decades. âStock brokers, who needs them,â said Malavase rhetorically.
No snap judgments
Using the on-line company Buy and Hold, the women purchase stocks after research, discussion and a common vote. âWe had one member who wanted us to vote on stocks and then drink the wine,âremembered Balas.
âYeah, sheâs not with us anymore,â said Westbrook.
At about 15 members, Ten Star follows about as many stocks as it has women, because each member is given a stock to follow and report on every month.
Because of this system, the group shies away from volatile stocks that require daily monitoring. âMainly because weâre in it for the long haul; we donât make snap judgments,â said Malavese.
They made one exception this year, however, for Aluminum China, a stock on which the group doubled its money in a short period of time, and to which they credit much of that 13% rate of return. âIt was like, âOh my God.â It was too good,â said Malavase. âWe were sending each other e-mails, and we were all on our cell phones, asking âWhatâs it doing now?ââ
After a buy-in fee, each member pays monthly dues of $35 and owns a stake in the group portfolio. John Deer has been one of the groupâs best performing stocks, while the stock in which they own the most shares is General Electric.
Ten Stars do buy the occasional âsexy stockââKrispy Kreme Donuts is a recent exampleâalthough the group avoids investing in tobacco and fast food. Itâs more because those stocks are reliable, and not because the group bases its investments on its idealism. âWeâre not moral at all,â said former salon owner and Realtor Carol Miller. âWe invest purely on scientific gains.â
Thatâs not entirely true. The group rejected purchasing Wal-Mart stock, because the women didnât approve of the companyâs culture. Real-life experience factors into their purchasing as well, with each member of the group valued for her unique opinion.
âAlmost all these women own their own companies or are somehow involved in the community,â said Westbrook. âTheyâre really pretty savvy women in their own individual fields, even if theyâre housewives, and the group benefits from that exchange of knowledge and personalities.â For example, When Caroline Sallee Reilly, owner of ACKtivities event planners, became a new mom, she encouraged the group to purchase stock in Kimberly-Clark, which owns Huggies diapers.
The whole point of the club is to merge the known with the unknown and to learn through and with one another. âItâs not like being a student in a classroom, where youâre afraid to ask questions out of fear of looking dumb,â said Sheila OâBrien Egan, owner of Swainâs Travel Agency.
âI never watched the stock market. In the beginning, I couldnât even get on the computer,â recalled Miller. âIâve learned a lot.â Malavase said the groupâs members have grown together at a pretty uniform pace. Now, theyâre up for just about anything, except mutual funds. âWhy would we be?â Malavese said. âWe are a mutual fund.â As for the Dow Jones Industrial Average, when asked during an impromptu phone call if she knew what it was, Sallee Reilly responded without missing a beat, âAbout 3,000. No, wait, thatâs the NASDAQ. The Dow is at around 13,500.â