We’re beating the City slickers on the stock market, YOU can too! Meet the power pensioners running one of the UK’s most successful investment funds (and they began with just £100!)
- Nine women from Bournemouth and Poole set up a DIY investment club in 2000
- The China Dolls have trounced 99.6 per cent of professional fund managers
- The retirees aged between 64 and 74, began as a fun way of investing in shares
- They now have a 23 stocks portfolio, £111,000 in value – rivaling City hedge funds
- They have invested in the likes of ASOS, Fever- Tree and GW Pharmaceuticals
- The China Dolls are set to launch a website to help others to start clubs
At an age when many retirees are being careful with their finances, the China Dolls — nine intrepid women who set up their own DIY investment club — are treating themselves.
Christine Smyth, 64, a former hotelier and entrepreneur, tells me she took a holiday of a lifetime on the Trans-Siberian Express. Virginia Smith, 68, a retired radiology manager with four grandchildren, bought herself a new car — ‘a little white Ford KA’, she says, with a gleam. There have been expensive foreign holidays and days on the golf course.
They may not look like money-savvy City slickers, but don’t let appearances fool you. At a time when women risk being poorer in later years because we don’t invest — earlier this year Chief Secretary to the Treasury Liz Truss called on women to be less ‘squeamish’ about making money — the China Dolls are an inspiration. They have trounced 99.6 per cent of professional fund managers within the UK All Companies Sector, covering funds investing in firms on the London Stock Market, and this week launch a website to help other women start their own clubs.
The nine women (pictured: Christine Smyth, 64, Pam Stebbings, 70, Pam Gibson, 64, and Mary Stevenson, 69) behind The China Dolls investment club revealed how they built a portfolio that rivals hedge funds in the City
Based around Bournemouth and Poole, the ladies set up theirs nearly 20 years ago as a fun way of investing in shares. ‘Our children had gone off to university and our parents weren’t too demanding, so we had a bit more time for ourselves,’ says club treasurer Pam Stebbings, 70, a former accountant and grandmother to six.
The first meeting of the China Dolls in 2000 was in a Chinese restaurant.
Their name comes from the old saying ‘all Lombard Street to a China orange’ — a 19th-century idiom meaning very short odds. Lombard Street in the City signified wealth, and a China orange, a once very common and cheap, sweet fruit meant poverty. (‘We were going to be the China Dollies, but we looked it up and it was a porn site,’ laughs Valerie Hook, 72.)
When they started, they just wanted to feel less naive about money. The last thing they expected was that their investment skills would start making national newspaper headlines.
Today their portfolio stands at 23 stocks and £111,000 in value — and is considered one of the most successful investment funds in England. It has returned 46.2 per cent in the past three years, a return that rivals many hedge funds in the City.
The nine China Dolls’ former professions include college lecturer, radiology manager, anaesthetist and music teacher. ‘We’re aged between 64 and 74 and quite an eclectic mix,’ admits club treasurer Pam.
They’re all pensioners apart from Christine. ‘I was born in 1954, the generation who were informed very late that we do not get our pensions until we are 66,’ she says ruefully. Some are well-off Baby Boomers, who did well out of property; one still works part-time. But they are equals in the club.
They meet once a month to chat though their investments over dinner, with a different member hosting each time. At the start they invested £100 each, and paid a standing order of £30 a month. (It’s now gone up to £40.)
‘You don’t need to have a lot of money,’ stresses Marcia Caton, 68, who does the accounts for an architect’s practice three days a week and has four grandchildren.
Pam puts their success down to ‘being lucky, spotting new trends and taking risks’. Yes, they read the financial pages of the newspapers, but as women they intuitively pick up tips at the supermarket or while socialising.
The China Dolls (pictured: Hazel Bayliss , 74, Valerie Hook, 72, Marcia Caton, 68, and Virginia Smith, 68) have seen their investment in Fever-Tree grow by more than 2,000 per cent
‘We do observe things locally. I think women are good at that. Recently we bought stocks in SafeCharge International, a payment solutions provider for smaller businesses. I noticed that my golf club had started outsourcing payments, for example.’
Their largest holding is Fever-Tree, the drinks company, which since they bought it in 2015, just after it floated, has grown by more than 2,000 per cent.
They bought it at £2 a share; the share price is now more than £30. They spotted Fever-Tree was a game changer in the mixers market.
‘It’s very clever. They’ve gone for the younger people’s tastes — it’s a slightly sweeter mixer, with their botanical tonics and ginger ales. We noticed they were selling it in Waitrose,’ Christine recalls.
‘Then we saw it being served on BA and we read Tesco had fallen out with rival Schweppes.’ Thanks to Hazel Bayliss, 74, a grandmother of four and former music teacher, they’ve also made a lot of money on Croda International.
‘My granny invested in it and she told me it was a good solid company. So we call it Granny’s Share.’
The stereotype is that women are nervous creatures when it comes to money. But the China Dolls often invest in riskier areas of the British stock market, too.
Alongside solid shares in Whitbread and the Prudential, they regularly buy stock on the Alternative Investment Market (AIM), which covers smaller companies and start-ups such as Fever-Tree and allows you to invest at the early stage of a firm’s growth.
‘The reason we can take risks is because we’re doing it as a group,’ says Virginia. ‘I don’t have any shares personally. I can’t stand the stress. It makes me feel sick. But it’s different as a group.’
Other Aim shares the club has owned include online fashion retailer Asos.
Christine (pictured right with Pam Stebbings and Pam Gibson) believes if the club had been more organised at the beginning they may have been able to sell their shares in Marconi before the company collapsed
‘It was when they were still copying celebrities’ dresses. We noticed all the young girls were buying clothes online and bought shares in 2003 at around 50p when it first went public [they are now just under £40],’ says Mary Stevenson, 69, a retired anaesthetist with five grandchildren.
Anticipating the fashion for cannabidiol, or CBD, a while back they invested in GW Pharmaceuticals, a medicinal cannabis producer. And one of the club’s favourite stocks is Genus, a medium-sized biotechnology firm famous for its prized bull semen, used to impregnate cows. It’s done rather well. They joke that the stud is their club pin-up.
The value of investments can fall as well as rise, of course. A lesson the China Dolls learned from investing in telecoms giant Marconi — ‘a good solid company or so we thought’ — when the club first formed in 2000.
A year later, profit warnings caused the company’s share price to collapse.
‘We weren’t quite so organised at the beginning,’ Christine explains. ‘If we’d been more diligent about reading articles on Marconi, we may have been able to sell our holdings before the company went under.’ Now they are expected to do two hours of homework before the monthly meeting.
How can you get rich with your friends? Your step-by-step plan
- A club could be made up of families, neighbours, friends and work colleagues. You don’t have to be investment experts, simply people interested in trying to make money buying and selling shares.
- Gather people with a variety of hobbies, experiences and outlooks, so you can pool expertise.
- Form a club with at least eight to ten members, but no more than 20. Too few and you may not have enough cash to invest. Too many and you’ll have trouble listening to each other.
- Agree on a regular meeting time and place. Or make it fun by socialising at each other’s houses, like a book group.
- Set joining fees and monthly subscriptions, which are deposited in a joint account. It should be money you don’t need for at least five years, so you can ride out market falls.
- Appoint a chairman (who runs the meeting), a treasurer (who deals with the bank accounts, buys and sells shares and keeps records of the club’s holdings) and a secretary (responsible for the minutes of each meeting).
- Buy the ProShare Investment Clubs manual (£25). It includes all you need to get started, including legal documents and accounting paperwork. ProShare provides a programme for valuing and monitoring the club’s investment and producing year-end tax reports.
- Your £20 or £50 initial contributions could grow significantly, so you’ll need to have formal agreements in place to protect yourselves. Make sure nobody runs off with the club cheque book! Ensure two people have to sign up to any financial transactions.
- Agree what you won’t invest in. The China Dolls will not touch cigarette companies or gambling.
- Find an ‘execution only’ stockbroker who buys and sells shares for the club. Or you can use an online trading option.
- Money held within a club account falls outside of your Isa and you need to fill in a tax return at the end of the year.
- Never be embarrassed. Members should be encouraged to ask questions if they don’t understand something.
- Have fun. For many, the social aspect of the club is as important as the investing.
Each member is assigned two or three shares to follow so they can spot if any look vulnerable because of a profit warning.
If a member has spotted a new tip, they’ll research it for the next meeting. Pam is looking into crowd-funded bank Monzo, loved by millennials because there’s no commission on currency when you go abroad.
They’re also exploring virtual reality. ‘My 13-year-old grandson is desperate to have a VR set,’ says Mary. While Virginia is fascinated by the rise of low — or zero — alcohol drinks such as Seedlip.
The day after the meeting, Pam will buy or sell shares. ‘It’s always a group decision. If we go for a share and it completely tanks, we don’t blame the person who suggested it, because we all made the decision.’
‘Though if we pick a turkey, we might bin it after three months,’ laughs Christine.
The ladies are delightful, but you sense they can be tough.
‘Early on, we were thinking of buying Marks & Spencer shares, then we all walked into Marks one summer season and thought: “Oh my goodness, this will never sell!” ’
They came out of retail a long time ago — wise as the High Street plunges. But they remind me many brands are part of bigger conglomerates, so their holding Associated British Foods actually owns Primark. And their other holding Whitbread owns Beefeater. I’m getting an education just listening to them. Pam produces a monthly valuation for each member telling them how much they’re worth.
And they can take out money in a block — say £10,000 for a daughter’s wedding or a new car — if they give the club three months’ notice to sell shares.
They will have fewer units in the club after withdrawing cash, but they still have the same democratic vote.
One of their initial stockbrokers told them not to have more shares than members. ‘Well, ladies find that boring,’ Marcia laughs.
They rarely dip into the portfolio for expenses, but make an exception for a five-star lunch and meeting at Chewton Glen every Christmas. And as we leave the Mail photo shoot, the Dolls are off for supper at the chic Ivy Kensington Brasserie.
There are strong characters in the group, but they never fall out because they know it’s a winning team. ‘We’ve never had any rows or bitchiness, it’s all debating,’ says Valerie.
‘When you get to our age, you learn to put up with other people’s foibles,’ laughs Pam.
The club has come to be about far more than money.
Over 20 years, they have seen each other through family illness and bereavement. Discreetly they keep an eye out for each other and make sure no one is carrying a heartache on their own.
And the excitement of beating the professionals is addictive, says Marcia.
Pam (pictured with Pam and Christine) revealed one of their husbands whose in an all-male investment club hasn’t had much success and often turns to The China Dolls for advice
‘I think the majority of women have their men controlling their finances, and it’s nice to have something we’re doing ourselves, I’m a widow, my husband died some years ago, and my friends quite admire me for carrying on because the financial world is very much a man’s world.’
Those still married agree it’s added pep to their relationships.
Valerie, who worked in banking security for 30 years, says: ‘My husband was managing director of a finance company for years, so rather than feeling intimidated, I had something I could talk to him about when he came home having done these massive million-pound deals.’
Their husbands and sons are gobsmacked by their achievements. One of their husbands is in an all-male investment club, too.
‘They’re all retired solicitors and bankers and they’re so conservative,’ says Pam. ‘Their club hasn’t been very successful. So he’s always asking us for tips.’
Of the 8,500 or so investment clubs in Britain it’s impossible to know how many are all-women.
But over the years witty names registered for female ones have included The SilkSTOCKings, Blooming Assets and The Shareettes. One group of women named their club the Stroke of Luck because they all met at a doctor’s surgery.
Their husbands had had strokes, leaving the women suddenly needing to take control of the family finances.
The China Dolls are certainly keen to encourage more women. This week they’re launching a website to help others start their own investment clubs.
‘I’m hopeless with money, but I’m definitely going to persuade my friends to give it a go.
‘If we can do it, you can do it, too,’ Mary assures me.
Source: Read Full Article