|In This Issue:
Absolutely Your Last Chance to Save on Club Tax Printer Software
Has your investment club purchased the 2012 Club Tax Printer program from ICLUBcentral yet? There are just two days remaining before the early bird special pricing expires!
Does your club wish to save on the essential club tax preparation software — and prepare accurate returns for the Internal Revenue Service and/or your state tax agency? Time is running out to buy your Investment Club Tax Printer at the lowest cost available!
Is your club's treasurer on the ball and ready to close the book for 2012, including pre-ordering the 2012 Club Tax Printer from ICLUBcental? If not, forward this email to the treasurer immediately to make sure he's aware of the penalties from delaying!
Got questions about the process of club tax filing preparation? Check out ICLUBcentral's comprehensive support for investment club tax preparation, or sign up for our free Investment Club Webinar Series and attend January's session on tax filing.
Four Keys to a Successful Investment Club
by Doug Gerlach,
President, ICLUBcentral Inc.
It's a sad fact that not every investment club that is formed will be successful. But that doesn't mean success is outside your grasp. Here are my four key principles to which all clubs should adhere if they wish for a profitable and pleasurable investment club experience.
- Agree on an Investing Approach and Stick to It.
Members of successful clubs share a unity of purpose and a consistent methodology regarding how they'll invest in the market. If some members in a club want to pursue short-term strategies and others prefer the buy-and-hold approach, the resulting discord will doom that club to failure. Likewise, if some members wish to invest in mutual funds or exchange-traded funds and others prefer to invest only in stocks, the club may find it hard to reach a consensus when it comes time to make investing decisions.
All members should understand and abide by the club's approach to investing. New members should be indoctrinated right away into the club's chosen investment policies. I suggest that clubs formalize their investment methodology in an Investment Policy Statement document that includes the club's objectives and line of attack with respect to its portfolio. This way, there will be no confusion if a member suggests a divergent path.
- Think and Act Long-Term.
A long-term, buy-and-hold philosophy — planning to own every stock for five years or more — has proven to be the best approach for investment clubs because it suits the monthly meeting schedule that most clubs employ. Even as today's investors are under constant barrage from news and information, both online and via mobile apps and smartphones, it doesn't change the fact that little of this increased “information” is useful to long-term-oriented investors. It's merely noise that can disorient you and cause you to act unnecessarily. BetterInvesting's long-term approach is successful even in today's volatile market because it doesn't require being tethered to your computer during market hours. Let the short-term market players try to make sense out of meaningless information and keep your club's focus on the long-term potential of your holdings.
Even in an online club, it can be difficult (if not impossible) to manage a short-term investing strategy, where decisions to buy or sell stocks need to be made very quickly. That said, a “buy and hold” mindset doesn't mean “buy and never sell” or “buy and forget.” Constant vigilance is required to ensure that stocks in the club's portfolio are on the right track.
One irony about the emphasis on a long-term investing approach for clubs is that the average new club exists only for four years before closing up shop. As a result, many clubs never get the chance to experience the gains that come from investing with a five-year horizon....
IAS One-Year Review: O'Reilly Automotive
O'Reilly Automotive (ticker: ORLY) was trading at $61.13 when we profiled the company for the January 2011 issue of the Investor Advisory Service. At the time, we gave shares a buy-up-to price of $64. How has the company performed since then?
There's always a bull market somewhere! When we recommended O'Reilly Automotive in 2010, the S&P 500 was at 1,228. It recently closed at 1,257, up 2%. An investor holding an S&P 500 index fund would have earned about 4% during the period, including dividends. By comparison, O'Reilly closed recently at $79.53, a return of 30%.
In our feature, we noted the company's countercyclical nature. Between 2005 and 2009, new vehicle sales had fallen from over 17 million units to fewer than 11 million, as tough economic times kept people in their old cars longer. That meant increased demand for auto parts, and the replacement parts industry turned into a very good one for investors during those years. ORLY stock had already rallied 60% in 2010 when we highlighted the shares, but we thought they had more room to run. ...
Year-End Holiday Schedule for ICLUBcentral Support
Please note that ICLUBcentral's offices will be closed for several days at year-end in order that our staff can celebrate the holidays with their families. On these days, our phone lines will not accept calls for sales or technical issues, but you may request help using our online system and we will address your inquiry during the next available workday.
The dates of the coming office closures are:
- Friday, Dec. 30, 2011
- Monday, Jan. 2, 2012
Many investment club treasurers will use the holidays to close their club's books and start preparing their investment club tax returns. While the early bird pricing for the Club Tax Printers expires on Dec. 31, 2011, we recommend that clubs not wait until the last minute to place their order. Pre-order your Club Tax Printer today.
We express our sincerest wishes for a happy new year, and look forward to serving you in a prosperous 2012.