A lot of the things that we are doing in the investment club are one big experiment. I know investing and I know stocks but the concept of an investment club is something new to me. Furthermore, investing with 100 people involved is something completely new to me as well. By the way, kudos to us for getting to 100 (actually 98 but by the time I finish writing this we will be at 100).
I have seen our portfolio rise BIGLY over the last few weeks and it is awesome. Currently our total portfolio is up 3.42% which is significant considering the size of our portfolio. Our best performers are Visa at +11.95% and SPYG at +9.32%. We also strategically took our UA holding from a 40% loss to 13% so we saw a huge gain there. I am always impressed at the fact that we are doing what is rarely done in the African American community and what MOST would have either never attempted and/or considered impossible.
That said, I have an idea for how we will ultimately take gains when that time comes. If you have been following your bivio account you will see that it tracks your involvement by unit not by dollar amount. Bivio has effectively turned the investment club into something like our own mutual fund. What is cool about that is your money is tracked to the performance of the club as a whole not individual stocks.
My idea is that as the entire portfolio performs we will take dividend distributions from the total portfolio gains, not individual stock wins. This is significant because different stocks increase in value and pay dividends and as a member you don’t necessarily get the direct benefit, you get the total benefit as it relates to the broader portfolio. This is the most fair and efficient way to conduct business.
I always get questions about ROI and how we plan to use dividends and I think this should shed some light on how we function. We have individual holdings that if you were investing on your own outside you would take. But since this is a pool our actual return is the total portfolio increase and then distributions will be paid out of that, not the individual holdings.
I hope this sheds light on what we are doing. At the end of the day we are doing a great work just simply through cooperation and group economics. There are a ton of benefits that come from what we are doing but I am just proud that 100 people came together to work toward a bigger purpose than themselves. Always remember that the long term wealth we are creating will far surpass any short term gains. Also remember that with our pooled resources we are going to tap into much greater wealth through the strategic planning by myself and our advisory board.
I thank you all for working with this club and for your support.