Maybe you've heard of his company--Ariel Capital Management. I was reading an article posted on CNN and was quite intrigued with his "investment plan." Summed up in the article title "Buy. Hold. Profit. Give Back." Here are some of the highlights of the article:
Rogers typically holds a stock for four or five years, an eternity compared with the 14-month holding period of the average mutual fund...In the past decade his fund has earned nearly 14 percent a year, beating the market by more than five percentage points annually and outperforming three-quarters of all similar funds.
Ariel appears to refrain from loads or high fees, but if you have a 14-year record of beating the market by an average of five points is not too shabby at all! It just goes to show the superiority of patience and risk-taking by buying and holding the right stocks, without running up fees by having a high turnover (the flagship Ariel Fund has a turnover of 28%). To be fair however, compared to others in the business under the same investment strategy, he is par for the course in terms of performance--about average. But let's not stop there.
What really stands out is the "give back" portion of the investment strategy, on how he decides to empower inner-city students by teaching them the importance of investing.
Question: Why don't African Americans save and invest more?
Answer: I think it comes down to public education. The "three Rs" need to be the three Rs and an I: reading, writing, arithmetic and investing. Financial literacy is just as important in life as the other basics.
Question: How have you tackled that problem?
Answer: We wanted to start with very young kids. So we adopted a public school on Chicago's South Side and made investing part of the curriculum.
We give a $20,000 class gift to the first grade and manage it, with John Nuveen & Co., until they are in sixth grade. Then the kids take over and pick real stocks with this real money.
When they graduate in eighth grade, they give the original $20,000 back to the incoming first grade. They donate half of any investing profits to the school and divide up the rest.
With that money each student opens a 529 college savings account, to which we donate another $1,000. So they leave with something tangible. And the investment curriculum helps these kids with their math skills; the test scores are really high.
I think this is a great idea, and I hope to do something similar in the future--I may not be able to pull from millions to give back, but I definitely admire and will support results-oriented programs like the one above in any capacity that I can, financially or otherwise. I also encourage you readers to seek out and support similar programs in your area--whether it's through corporate responsibility programs like Ariel is doing in Chicago, or giving regularly (financially and by volunteering) to your place of worship or civic organization. Seeing this makes me hope they will pull out a similar program here in New York City. It also shows how investing in your community will help us all over the long term.
Well, there's a thunderstorm a-comin,' so I'll get off this computer. I will be traveling over the next two weeks, so if you don't see any articles from me directly, please don't hesitate to check out our Newsreader over to the right (which is updated every day). Those of you reading through Facebook will have to click through to our website.
See ya soon!
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