Frontier Investment Club has a 67-year tradition

The eight current members of Frontier Investment Club keep their decades-old tradition alive by following a formula that works for them. They pool their money to vote to buy or sell the stocks they research, and have fun in the process.

Call it a long-term investment in stocks and friendships.

“Investment clubs aren’t about getting rich. They’re about sharing ideas and learning about stocks,” said Dan Wilson, who joined in 1987.

Frontier Investment Club is based in Lockport. The club meets monthly at a member’s home, with each member taking turns hosting the meeting.

Members share the task of group tracking and updating the stocks in their portfolio. Then, at each meeting, one member is tasked with presenting a new stock for the group to consider. They decide whether to buy or sell by secret ballot.

But that’s not all. Members also have time for refreshments and socializing.

Frontier Investment Club is recognized as the oldest BetterInvesting-affiliated club in New York State. BetterInvesting is the official name of the National Association of Investors Corp., a nonprofit organization with roots dating back to 1951 that promotes investor education.

The 13 original members of the Frontier Club all came from Harrison Radiator, a manufacturer owned by General Motors. The club he founded in 1957 and filed papers to form a partnership five years later. One of the original members he was still part of the club when he passed away in 2006.

The Frontier Club has had 50 different members throughout its history. His current eight members come from a variety of backgrounds, including manufacturing, technology and finance, although the size of the club varies. Mr. Wilson, the longest serving current member, is retired and previously owned a fiberboard company.

Another club member, Rich Scott, said different perspectives make for good discussion.

“There are no stupid questions here, because you’ll get an educated answer from one of them,” he said.

They have experienced the highs and lows that come with owning stocks. Wilson recalled the dot-com boom and bust cycles of decades ago.

“We climbed on it,” he said. “We rode it down.”

Currently, Frontier Club’s longest-held stock is Amazon, which a club member purchased in 2017.

Club members declined to provide details of the current investment amount. But they say their stock’s performance roughly tracks market outcomes over the long term.

In other words, don’t expect Frontier members to write bestsellers like the Beardstown Ladies, an Illinois investment club that declared it significantly outperformed the market in the 1980s and 1990s. . (A subsequent magazine investigation revealed that the club’s revenues had been greatly exaggerated.)

According to Dennis Genord, director of education and chapter development at BetterInvesting, members of BetterInvesting affiliated clubs are typically connected to each other through common ties such as friends, family, places of worship, and workplaces.

Genold said the Frontier Club deserves credit for continuing to operate after all of its original members were replaced over time.

“If the original members were lucky enough to spend decades that way, they want to pass on what they learned and how they benefited,” Genold said. said. “Then it comes down to whether that group has the chemistry necessary to run long distances.”

Genold said many Better Investing-affiliated clubs limit the amount members can contribute each month.

“This is not like a 401(k), which is your primary savings account for retirement.” (Frontier Club members may contribute $20 to $50 per meeting.)

But being part of a club helps members become better-informed investors, Genold said.

“These members are taking what they learned from the club and applying it to managing their own personal stock portfolios,” he said.

Ideally, investment clubs should keep their portfolios to no more than 15 to 20 stocks, Genold said, which is enough to diversify the portfolio but not so many that members are overwhelmed with work.

And Genold said it’s important for people forming or joining a club to be aware of the responsibilities they have, including the time constraints.

“They need to understand that they’re going to be a part of this. This isn’t just a street book club,” he said. “You can have fun and it’s social, but when you have money, everything becomes serious.”

At a recent Frontier Club meeting, members gathered in a circle on chairs as Sadie the dog patrolled the living room. They started the night with 11 stocks in their portfolio, and say that number keeps things manageable.

To research stocks, members can read free reports from independent research and financial publisher Valueline at public libraries. Other members also use the wealth of resources available online to gather information.

BetterInvesting magazine also provides tips on stocks to consider, which members may also use. BetterInvesting has announced that it will list Paychex as a “stock to consider” in its June/July issue. The human resources and payroll services company was founded in Rochester by billionaire Tom Golisano, who once owned the Buffalo Sabres.

Frontier Club members took turns sharing the latest news on the stocks they reported on, including Clorox, Tractor Supply, and M&T Bank. Some people read from paper notes, others from their mobile phones.

Gordon-Smith noted that Tractor Supply plans to continue adding stores. The company’s plans are on the horizon. Tractor Supply is building a new store on Transit Road in Lockport.

“This is something we should keep,” Smith said. “This is a good stock.”

Smith’s late father was also a member of the club. At one point, the two were members at the same time, allowing them to work together.

When new members join, it is usually by invitation from a current member. The candidate will attend several meetings as a guest. Then, at the next meeting, without the candidate present, members will vote on whether to allow the candidate to participate.

Ronald Bechtold joined in 2007 at Wilson’s invitation. Their wives taught school together.

Bechtold remembers a class in high school where each student was assigned a stock to follow to learn how the market worked. Decades later, he is doing that kind of research again.

His wife is also interested in the market and will discuss stocks the club can invest in.

“I bounce things off her,” he said.

Bechtold said he not only learned a lot from the presentations, but also enjoyed the camaraderie. “They’re really good guys,” he said.

Another member, Kevin Clark, presented the group with two new investment possibilities. That’s Paycom Software, an online payroll and human resources software company. LKQ Corp. supplies replacement parts for vehicles.

After the presentation, Scott collected members’ orange paper ballots and counted them by hand on the carpet. Neither stock received the two-thirds vote needed to buy the club.

The only change the members agreed to make to their portfolios was to place a “trailing stop” on one of their stocks, Analog Devices. This means that if the share price falls below the specified price, the club will sell to protect its investment.

After about 90 minutes, the meeting ended. The members went their separate ways to the front door until their next meeting.

As he left, Wilson offered his thoughts on why the club has been able to survive for decades, through the ups and downs of the market and changes in membership.

“The social part is really, really important,” Wilson said. “There’s a good mix of people from different industries, and I think that’s really valuable.”