The OICs of DevonOur club was formed after the idea occurred to two friends independently and they casually mentioned it to each other. One of them, now the chairman (woman? - so what do you call her these days?!), had been nurturing her idea for some time and needed moral support. The impetus came from a New Year's Resolution (to do with sorting out personal finances, of course) and a chat over a whisky with said like-minded friend.Over the next few weeks, without difficulty, eleven equally keen individuals were recruited. Finding enthusiastic people is fairly easy in our village as it is close-knit, supportive and active in many ways. Most of the OICs are also members of a Twinning Association which celebrated its twenty-fifth birthday in 2000. We are also largely professional people, four women and seven men, some retired, some native, some immigrants to the area. Perhaps this variety is what contributes to the outward-looking attitudes and open-mindedness that we reckon we have, [and thus our ability to embrace what is going on in the world at large].We had our first exploratory meeting at the end of February 2000 when the philosophy of investment clubs generally was introduced and the expectations of each individual were divined, so we could conclude whether it was to be approached as purely a money-making venture or, as we eventually decided, that it was to have a social function as well as a learning one. Many of our members had some investment experience with some being quite knowledgeable whilst others knew nothing at all and were hoping to learn. The chairperson herself has a habit of bombarding people with questions and hopes she now knows a little something about price-earnings ratios, gearing, etc.It was encouraging to find that everyone who attended that preliminary meeting returned for the inaugural meeting a month later. We agreed right from the start that we would meet in members' homes in turn and that our number would be limited to the original eleven because that is how many could fit around most people's dining tables! We can look forward to wine and nibbles and, although they are very social, the meetings tend to get down to business straight away because that is the excitement of it. There is time for (more) gossip at the finish and of course we meet at other social events. No doubt once we are well-established (and, dare I say, successful) we will become more ambitious and spend some of the profits on meeting over an occasional gourmet meal.We have ProShare to thank for giving us the guidance (through its manual) in setting up the club so that the organising could be done as efficiently and officially as possible in order to avoid future problems. I am sure that the fact that we firmly decided on a constitution and on rules helps to give our members confidence in how the club runs.The format of our meetings follows that laid down in the ProShare manual, but our methods of reporting on potential investments and our system of choosing one among many are constantly being refined: our first year has been marked by a sharp learning curve! So far there has been no major disagreement and we haven't even had to resort to picking straws!The choice of name (something that is not easy at the best of times) was done democratically. Everyone made suggestions which were then subject to a vote. Our chosen name serves to describe what we are and where we are from (the Otter Valley) and it abbreviates happily. It is serendipitous that the acronym can also describe our structure - an open-ended investment club, to rival the OEICs of the City.!We decided on an initial £250 and a monthly £26 as the fixed subscription for each member - enough for the club to work with, enough to create anxious commitment from all of us, but not enough to breach the life rule that if you can't afford to lose the money you shouldn't invest in equities. In order to compromise between sensible lot sizes (given the dealing costs) and a spread of holdings we decided to buy in lots of about £800. We also decided on direct purchase of equities and we use Barclays Stockbrokers for simplicity*. After a few months we decided to collect an extra £5 per person to invest monthly in a European Investment Trust.It is early days, yet, but something we are beginning to notice and which could be a problem in the future is a marked reluctance to sell - this is where division in the ranks is most apparent. "But we said we would" is also heard and goes to the heart of the decision-making process and whether circumstances should alter decisions.Nevertheless, it seems everyone is willing to 'hang in' with a view to the long term (not really sure just how long that is), but we have had inspiration from an investment club we have heard of who have used their profit to hire a yacht in the Mediterranean - perhaps one day or are we counting our chickens?!
* We have recently switched to trading online with .comdirect.
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