By Marli Guzzetta
Photography By Nathan Coe
Since the days when whalers’ wives ran Nantucket’s 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 respondents’ grasp of current events. The quiz addressed everything from the name of Russia’s 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 “Women & Money: Owning the Power to Control Your Destiny.” 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 they’re just too busy.
No matter what the cause, Orman, like most financial analysts, states definitively that money—especially investing—is 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
Nantucket’s Ten Star Investors club has consistently bucked that trend, meeting once a month in members’ homes to discuss the stock portfolio they’ve 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 group’s “senior partner” 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 Westbrook’s 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.
“We’re an eclectic group of women who are at different points in our lives,” summarized the group’s 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.
“It seems that wine and cheese with an occasional winter bowl of chili accompany our investment gatherings,” added Balas. “Not only do we share our investments and education of finances, we have become friends.”
This atmosphere of friendship has been crucial for many women entering the world of finance via investment clubs. “Our investment clubs skew about sixty five percent female,” said Bonnie Reyes, president and chief operating officer of NAIC. “That’s 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.”
Reyes said she’s found women’s investment groups to be “more socially focused. There’s more likely to be food and networking and more fun things involved. With men, it’s more business.” This convivial group atmosphere initially helps to demystify the process, added Reyes. “But the main thing we’ve 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.”
Ten Star Investors did, as Reyes described, begin small. They’ve been consistently on the right track, with only a few layovers in the early years. “Someone looking at our early financials would have thought we were a wine club that occasionally traded stocks,” said Ten Star’s financial officer, Mary Malavese, who along with Balas was one of the group’s 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. “Stock brokers, who needs them,” 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. “We had one member who wanted us to vote on stocks and then drink the wine,”remembered Balas.
“Yeah, she’s not with us anymore,” 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. “Mainly because we’re in it for the long haul; we don’t make snap judgments,” 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. “It was like, ‘Oh my God.’ It was too good,” said Malavase. “We were sending each other e-mails, and we were all on our cell phones, asking ‘What’s it doing now?’”
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 group’s best performing stocks, while the stock in which they own the most shares is General Electric.
Ten Stars do buy the occasional “sexy stock”—Krispy Kreme Donuts is a recent example—although the group avoids investing in tobacco and fast food. It’s more because those stocks are reliable, and not because the group bases its investments on its idealism. “We’re not moral at all,” said former salon owner and Realtor Carol Miller. “We invest purely on scientific gains.”
That’s not entirely true. The group rejected purchasing Wal-Mart stock, because the women didn’t approve of the company’s culture. Real-life experience factors into their purchasing as well, with each member of the group valued for her unique opinion.
“Almost all these women own their own companies or are somehow involved in the community,” said Westbrook. “They’re really pretty savvy women in their own individual fields, even if they’re housewives, and the group benefits from that exchange of knowledge and personalities.” 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. “It’s not like being a student in a classroom, where you’re afraid to ask questions out of fear of looking dumb,” said Sheila O’Brien Egan, owner of Swain’s Travel Agency.
“I never watched the stock market. In the beginning, I couldn’t even get on the computer,” recalled Miller. “I’ve learned a lot.” Malavase said the group’s members have grown together at a pretty uniform pace. Now, they’re up for just about anything, except mutual funds. “Why would we be?” Malavese said. “We are a mutual fund.” 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, “About 3,000. No, wait, that’s the NASDAQ. The Dow is at around 13,500.”