Seven years ago, 10 African American women fresh out of college founded the Umoja Investment Club intending for it to be a learning tool. They wanted their club to help them better understand the world of finance as they began their careers as professional black women. Members say involvement in the club was and continues to be a great learning experience as they've increased their knowledge and made changes over the years. Umoja, which means unity in Swahili, added one male member about two years after its inception. But perhaps the most significant change the club has made is varying its investment strategies. "In the very beginning, we held on to stocks for too long," says Umoja member Cheryl Trent. "We've grown in that [now] we pay a lot more attention to the sell and buy range of each stock." Trent says the club has also expanded the types of stocks it considers investing in. In its early days, Umoja didn't invest in small-caps at all, she recalls. The group also refused to invest in stocks that did not pay dividends. Now the club investigates small- and mid-caps as well as non-dividend-paying companies because they've realized that, when it comes to investing, it's the growth prospects of the company that matter most. Currently, Umoja is invested 100% in stocks, specifically large-caps. Umoja's vice president, Rebecca Saxon, says the club looks at the past 10 years of a company's price performance to track its health before selecting it. "We're looking for an upward trend as far as earnings per share and growth rate. We'd like to see [an increase of] around 14% for both of those," says Saxon, explaining the club's stock selection process. "We also look at the yield ... and of course, the return. And then we look at the management, especially for companies that are well known to us." After choosing a few promising candidates, the club votes on which stocks to buy based on National Association of Investor Corps. guidelines and key financial indices. Umoja uses information from NAIC to determine what a good stock is, how to make stock selections, and to make other informed investment decisions. As of Aug. 6, 2004, Umoja had 10 holdings in its portfolio, which was valued at $13,129.22. Two of the stocks in the club's portfolio, Home Depot (NYSE: HD) and Wal-Mart (NYSE: WMT), have cyclical shopping seasons. Investing in them near the end of the year could pay off by spring, says Saxon. The club expects the stocks they invest in to show a positive return over five years. Christa Barnes, club president, says that in order to have a diverse portfolio, the members of Umoja are considering mutual funds. The members of Umoja are from Virginia, Maryland, and the Washington, D.C., area. Membership is by referral only, and each member contributes $45 a month in dues. At the monthly meetings, stocks are selected through member recommendations. Saxon says the diverse backgrounds of the club's members makes for a good cross-section of industries in their portfolio, which includes retail, utilities, and recreation. Overall, Barnes is confident about Umoja's future: "We've kept our heads above water; we've made some money, and we're still growing." UMOJA'S HOLDINGS Company (Exchange: Symbol) Portfolio Weighting Synergy (NASDAQ:SYNF) 14% Wal-Mart (NYSE: WMT) 14% Home Depot (NYSE: HD) 14% Harley-Davidson (NYSE: HDI) 14% Pfizer (NYSE: PFE) 11% Â