When the stock market plunged a year ago, many investors were fearful, CNN host Anderson Cooper told the audience during his program Sept. 17. But not the members of the Mutual Friends Investment Club of St. Louis, a BetterInvesting-member club that has seen the peaks and valleys of the market for over 30 years.
“So what did they do?” Cooper said during the segment. “The same thing they’ve always been doing. Ray Bahr and his friends meet once a month for exactly an hour an 15 minutes. They have a strict agenda: to make money by beating the stock market.”
The club was featured in Cooper’s Money Summit special, which aired during the Anderson Cooper 360 program. The special focused on individual investors and the aftermath of the stock market downturn that began last year.
The Mutual Friends’ story reinforces the value of being in an investment club and taking the long-term view. Being in a club is “a learning process,” Ray said. “You learn from other people how to invest, when to invest, when to stay in, when to possibly withdraw. But the bottom line is to be patient with your investments.”
Ray started the club “with three friends, $60 and a paper ledger because they wanted to learn about investing,” Cooper said.
“Actually, I’m lying,” Ray said. “We got together to play poker and drink beer. And that’s why the first couple of years, we really didn’t make any money.”
That changed after the club joined BetterInvesting in 1976, which offers classes in investing. “Since then, the club has grown steadily, in members, in technology and in profit,” Cooper said. “The goal is to make a 15 percent return on their investments, and despite fluctuations in the market, they’ve done it consistently.
The club has built is $1 million portfolio just by following BetterInvesting’s principles. “The fundamentals are simple,” Cooper explained. “They invest on a regular basis. And they diversify their holdings. This club owns 17 stocks in 13 different industries.” The club’s holdings include Balchem, Emerson, Fiserv, Johnson & Johnson, Rofin-Sinar and Tractor Supply.
In explaining the club’s investment philosophy, Cooper said: “They say to buy quality over quantity. And most of all, be patient.”
“When we buy a stock, we buy with the idea that we keep it for life,” Ray said. “The best stock you’ll ever own is one you never have to sell.”
Because members have a long-term perspective, they weren’t overly concerned about the market downturn.
“We were down this past year, just like everybody else was,” said Jay Peters, a club member and longtime volunteer with BetterInvesting’s St. Louis Chapter. “It did not discourage us because we know there are peaks and valleys in the market and always comes back.
“It always comes back.”