Delores McGlory was always an avid reader of business and investment publications. But it wasn’t until this teacher from Houston grew tired of reports on the poor investing habits of African Americans that she decided to use the knowledge she’d gained to take action. “One of the things I noticed was that all the writers were talking about how black people didn’t invest,” says McGlory, founder and president of BE-WISE, an acronym for Black Educated Women Investing in the Stock Exchange. “That’s what motivated me to get a few of my friends together to form an investment club.”
In April 1999, 10 female educators ranging in age from 25 to 65 gathered at McGlory’s home to begin crafting bylaws with the help of tax attorney and personal adviser Preston James McGlory II, the founder’s son. The following May, a partnership agreement was finalized and BE-WISE became an official investment club.
Calling themselves the “investment sorority of the 21st century,” they vowed to remain dedicated to learning the inner workings of the unpredictable stock market. “Once we all came together, we realized that having poor investment habits was a serious problem, especially because we were passing on these bad habits to our children,” says McGlory, 60.
BE-WISE members convene monthly from September to May at the local library to discuss articles on investing, investment research, and stock exchange developments. Each of the nine members, all current or former teachers at Jewel Askew Elementary School in Houston, contributes $30 to the club portfolio at each meeting.
The
new club’s limited knowledge of the stock exchange was evident when they lost 20% on their investments after the first year. “When we got together, the market was on the rise and we didn’t realize just how low it could go,” says McGlory. In the beginning, stocks were chosen primarily based on popularity and whether group members used its products or services. But after Cisco Systems experienced a 40% loss in the club’s first year, the ladies began re-evaluating their investment strategy. “Now we’re trying to make better choices based on our experience,” say McGlory. “When we initially invested in Cisco, we spent a lot more for it than what it’s now worth, but we understand that now.”BE-WISE members still invest in companies they patronize, but now
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This perspective coincides with the club’s motto — hold on and be patient — and explains why the ladies still meet monthly despite the fact that their portfolio, which includes Playtex, General Electric, Pfizer, Cisco, and Home Depot, hasn’t had great gains during its first five years.
The members of BE-WISE have invested $17,500 since the club’s inception — roughly $2,000 more than the current value of their portfolio. The club’s five-year total return is a disappointing -13.7%, but the ladies remain confident. “We decided, as a part of our philosophy, that whatever we buy, we’re going to hold for five years,” says Janis Burnett, 50, the club’s treasurer. “And that’s what we intend to continue doing.”
BE-WISE Investment Club Top Holdings
| Home Depot Inc. (NYSE: HD) | 33% |
| Pfizer Inc. (NYSE: PFE) | 19 % |
| Univision Communications Inc. (NYSE: UVN) | 8.5% |
| Cisco Systems Inc. (NASDAQ: CSCO) | 13% |
| General Electric Co. (NYSE: GE) | 11.5% |