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ONLINE DOCUMENT: INVESTMENT CLUBS PROLIFERATE

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Investment clubs are booming around the United States, particularly in the Midwest - partly because of the phenomenal Beardstown Ladies and people like Peggy Schmeltz, of Bowling Green, Ohio.

Mrs. Schmeltz, chairman of the board of the National Association of Investors Corp., which represents more than 22,000 investment clubs, is one of the personalities featured in The Investment Club Book."Peggy is one of the many reasons the NAIC doesn't have to advertise," John Wasik writes in his paperback book (Warner Books, $11.99, 302 pages). "She's a dynamo who engenders word of mouth and seeds clubs wherever she goes.

"... In addition to being an ace investor in her own right, she is a member of three clubs in northwest Ohio and has helped start more than one hundred others."

Mrs. Schmeltz said there has been a tremendous surge in investment clubs in the last year, due in part, no doubt, to the national publicity given the Beardstown Ladies. That investment club, started by 16 women in Beardstown, Ill., parlayed its investment success into a best-seller, "The Beardstown Ladies' Common-Sense Investment Guide" and a video, "Cookin' Up Profits on Wall Street".

Now they're back, with another book, "The Beardstown Ladies' Stitch-in-Time Guide to Growing Your Nest Egg" (Hyperion, $19.95, 253 pages).

Mrs. Schmeltz said the NAIC added 8,350 investment clubs from May 1995 to May 1996, including 1,299 new ones last month, bringing the total to 22,450 and total NAIC membership to 433,150.

Investment clubs do very well in the Midwest, according to Wasik. "Some 20 percent of U.S.-based clubs are located in the `heartland' states of Michigan, Ohio, Indiana, and Illinois," he notes.

"All kinds of people are active members, from teachers to retired grandmothers, engineers to janitors. These organizations don't require business school resumes, special handshakes, secret oaths, or funny hats. The one thing their members have in common is a simple devotion to learning about investing."

Mrs. Schmeltz said her family - husband, William, a retired Bowling Green State University business dean, and their four children - have been involved in as many as 11 investment clubs in the last two decades. Currently, she belongs to three: First Ladies, Mount Ararat, and Signal Watchers, and one of them has a portfolio worth about $700,000.

"Peggy's own seven-figure success has made her a bit of a folk hero with the NAIC," Wasik writes in his book. "Her NAIC involvement ... has paid for the college educations and home down payments of her four married children. Every Christmas she gives $1,500 worth of stock to her 10 grandchildren for their college funds."

Wasik's book related some of Mrs. Schmeltz's keys to success, including these:

- "Keep in mind that it takes a few years to get your portfolio going. You're going to have some losses at first, but hang in there."

- "If you have a stock that goes lower - and all of the fundamentals are sound - have some confidence and buy more. It'll lower your average purchase cost."

- "Make sure your portfolio isn't loaded up with all cyclical stocks. Have some defensive stocks such as food and drugs."

- "If you have a winner, don't be afraid to sell a portion of it or half. If profit or management conditions change, look for another stock to replace it."

- "Every member of a club must contribute. Three or four members shouldn't be doing all of the work. There should be no silent partners."

- "Try to read outside investment resources such as Value Line and share your insights with the club. Watch for and clip articles relating to stocks held or being considered."

(Distributed by Scripps Howard News Service.)