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REWARDS


Double Play

03/26/01 11:15:25 PM PST
by Rachelle Waters

Investing isn't just about long-term rewards. This investor has turned her passion for the investing game into a paycheck.

For Shelley Bruzas, a die-hard Seattle Mariners baseball fan, the team's first season without Ken Griffey Jr. got off to an uncertain, although not unpromising, start. It was April 2000 and Shelley had front-row seats to the first home game against the New York Yankees. The Mariners had already beat the Yankees twice in previous games in New York, and they were hanging on to a 6-3 lead. In the eighth inning, the Yankees' Derek Jeter hit a fly ball to deep center -- trying to repeat his home run earlier that game. From her vantage point behind third base, Shelley had a spectacular view as outfielder Mike Cameron leaped to catch the ball. In response, the crowd roared, with a standing ovation that lasted a good 10 minutes.

Shelley Bruzas (center) and two founding members of Tacoma Women's Investment Group -- Arlene Perry (left) and Teresa Stephenson (right). Shelley's fellow investment club members helped her learn how to invest and continue to support and encourage her investment endeavors.


Cameron was new to the Mariners at the time, acquired along with three other players in the Griffey trade. His dramatic catch touched off a successful season in his career. And Shelley? She hasn't forgotten that play. In fact, she's made a few unforgettable plays of her own lately -- in her stock portfolio. She opened her first brokerage account in 1998, and thanks to careful stockpicking, market timing, and investment, she quadrupled her initial stake in less than three years. With the returns from that windfall, she could afford season tickets for years to come!

TRAINING FOR THE SHOW

Although Shelley has always been curious about the financial world, it wasn't part of her daily life while growing up. Her parents didn't follow the stock market or teach their children how to invest. "I relate that to sports," she explains. "If your family isn't into sports, you're not going to be. My parents were not sports people at all. I played sports as a kid, but we never watched it on TV or went to games. But now I'm a huge Mariners fan. I love baseball. Later in life, you get introduced to things you didn't grow up with." Investing, like baseball, was something Shelley learned about only as an adult. It took spunk to venture into the investment arena without any experience, but Shelley knew that this game, if only she could learn the rules, could change her life. With her 40th birthday fast approaching, she realized that she should have taken control of her finances earlier.

Like many investors, Shelley started with limited knowledge and even less capital. She didn't let that discourage her, though; instead, she chose to make the most of her resources. In 1997, Shelley and 20 other women formed an investment club, the Tacoma Women's Investment Group (TWIG). The club didn't break her budget -- her monthly contribution was only $30 -- and it was a safe place to learn. Plus, she enjoyed the support and friendship. Shelley comments that "TWIG has been such a benefit, just meeting with people and talking about investing."

Initially, the group chose stocks with the intention of holding them for five years. Buy-and-hold was the investment technique they were most familiar with, and it made sense at the time. After about a year, though, Shelley realized that she was ready to pick up the pace. She stayed in the club, but started actively investing her own account.

UP TO BAT

To prepare for investing her own account, Shelley read everything she could get her hands on -- magazines, books, The Wall Street Journal -- and attended a seminar through the National Association of Investors Corporation (NAIC), a nonprofit investment club organization. She scoured the Internet for investment guidelines and fundamental stock information. A financially savvy friend, Jim Peters, provided tips and advice drawn from his 39-year history of investing. Then, armed with her newfound knowledge, she chose a full-service broker and opened her "play account," a speculative cash account (in addition to her 401(k) and IRA), funded with money she wasn't afraid to lose -- money scraped together from extra cash reserves and withdrawn from the savings account she shares with her husband, Bill.

At first, Bill was hesitant to relinquish a portion of their joint savings in return for an uncertain yield, but Shelley was shrewd. Bill is a motorcycle enthusiast and he readily agreed to her purchase of Harley-Davidson stock. Peter Lynch's classic investment advice of "Buy what you know" still holds true -- with a twist, though. When part of your start-up capital is contributed by another person, don't just buy what you know, buy what your partner knows! To sweeten the deal, she threw in the promise of a new Harley -- investment returns permitting.

Over time, Shelley added to her holdings. "Whenever I got a few extra dollars, I would call my broker," she says. Her mother-in-law also got into the spirit, surprising Shelley with shares of Yahoo! (YHOO), a company Shelley had been watching for months before she even opened her account. Soon after, Shelley bought more Yahoo! -- a profitable decision, it turns out, especially since she sold the stock near its peak.

Shelley chooses stocks based on fundamental criteria, including sales, earnings per share, dividends, long-term debt, 52-week highs and lows, and news. Often, she evaluates a company's performance for as long as one year before purchasing its stock. "I've held as many as 25 stocks at one time, and I have a list of about 50 companies that I'm watching. About once a month, I check their prices. Some of the companies I take off the list; sometimes I put new ones on." How does she keep track of all this research? She takes copious notes in the stock notebook she got from her broker when she opened her first account -- and she carries that notebook with her at all times.

The time Shelley invests in her portfolio has paid off. Her most profitable stock picks have been ones she thoroughly researched. Take Healtheon/WebMD Corp. (Hlth), for example. When Shelley first heard about Healtheon, a company that creates Internet-based software for the health-care industry, she was intrigued by the company's innovative business concept. Further, Healtheon's management also caught her eye; it was founded by Jim Clark, the former chairman of both Silicon Graphics and Internet superstar Netscape Communications. Shelley followed Healtheon's development carefully and bought in at around $15, shortly after the initial public offering (Ipo) in 1999. The stock surged up to $127 in three and a half months. When the trend turned down, Shelley sold at $110, making a tidy profit.

Shelley feels good about her returns, because she truly earned them. She did her own research and made her own decisions. Although she uses a full-service broker, Shelley has "never, ever relied on his advice." She sometimes asks her broker for information about a company, but when it comes down to buy and sell decisions, she insists: "You have to do your own homework. You don't have to do it daily -- even though I pay attention daily -- but you have to take the initiative. It's your money."

TALLYING THE SCORE

Shelley views her "play account" as a lot of fun and a good learning tool. Better yet, she explains, it provides extra money that she can spend however she sees fit. When the coffers began to bulge recently, she decided it was time to act. "I wanted new couches and I wanted some credit cards paid off and it was around my birthday. I thought, OYou know what? It's time.'" She sold every stock in her account except for a few shares of Cisco, and this time she didn't reinvest. At least, not in more stock. Instead, she decided to rid herself of consumer debt -- an investment in itself -- and reward herself with leather furniture. Did she end up buying the Harley motorcycle? No, but it's still in the works. Besides, Bill recently opened a brokerage account of his own; perhaps the Harley would be a good goal for him!

She also set up accounts for her children. "I truly wish that I knew something about investing when I started working, back when I was 16. I'm trying to instill that in my kids." Her daughters Heather, Megan, and Brandy haven't caught the investing bug yet, but her eight-year-old son, Brandt, is already planning for his future profits. By the time he's 30, he intends to own a mansion complete with hot tub, maid, limousine, and quarters for Mom and Dad. And of course, season tickets to Mariners games.

Shelley's investments have been financially profitable, but she says the most rewarding aspect of investing isn't the money. More than money, she values being in control of her finances. She likens investing to health care. "If the doctor says you're sick but you don't take the time to learn more about the disease, you're crazy. It's your body!" And if you don't act, you suffer, Shelley adds. Likewise, if you don't learn how to handle your money, your financial health will suffer.

Shelley encourages her family and friends to take charge of their money and start investing now, before they lose any more time. She has helped many friends get started, just as Jim Peters helped her get started back in 1998. Sharing her knowledge has been one of the most enjoyable rewards of investing. At McGavick-Graves, the law firm in Tacoma, WA, where she has worked for 14 years as a records supervisor, Shelley trades "stock tips of the day" with her coworkers. They keep each other up to date on the latest developments in the market and exchange advice about investment strategies.

FOR THE LONG HAUL

Of late, Shelley has been focusing her attention on self-directing her 401(k), an option that only recently became available to her, although she contributed to the plan even before self-direction was offered. If your employer provides 401(k) benefits, she recommends, "Invest as much money as you can into any 401(k) plan offered to you. Starting out as soon as you can makes a huge difference."

According to Shelley, directing her own account has "brought me into a whole different world" -- the world
of long-term investing, that is. Before she started investing, she wasn't all that interested when the 401(k) advisors visited her office. "I understood what they were saying,
but a week later it was gone," she says. But now that she's actively directing her account, she's not only excited for their visits, but she has questions -- about what kind of companies to invest in for the long haul, among other things. She would like to retire early, and her 401(k) is an important part of her plan.

"I have a long way to go," Shelley observes. "I'm only 40. That sounds old to a lot of people, but when you look at it, you're going to have to work until you're 65 or 67. Of course, you're hoping that you can do something so you don't have to." She, for one, is doing more than hoping. She's enjoying the tangible, short-term rewards of active investing, but she's banking on the long-term rewards that only come through careful planning and diligent investing.

Rachelle Waters can be reached at RWaters@Traders.com.

REFERENCE

National Association of Investors Corporation (NAIC): 877 ASK-NAIC.



Copyright © 2001 Technical Analysis, Inc. All rights reserved.





Rachelle Waters


Title: Staff Writer
Company: Technical Analysis, Inc.
Address: 4757 California Ave. SW
Seattle, WA 98116
Phone # for sales: 206 938 0570
Fax: 206 938 1307
Website: www.Traders.com
E-mail address: RWaters@traders.com

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