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Not all investment clubs are created equal.

The vast majority are what they purport to be -- groups of average people learning about investing.

But a few "clubs" aren't about investing at all. They're thinly veiled pyramid schemes that promise fantastic returns for investing in ill-defined, usually nonexistent securities. Latecomers get burned when the pyramid collapses, either because the scheme runs out of victims or federal regulators and law enforcement officials step in.

The assets of one Ohio investment club were frozen last month after the Securities and Exchange Commission said it cheated investors nationwide out of up to $9.7 million.

How can you avoid being taken? Don't participate in any club that guarantees or promises outrageous returns. Make sure the investments are stocks that trade in major stock markets, such as the New York Stock Exchange, Pacific Stock Exchange or Nasdaq. Registration with the National Association of Investors Corp. is another good sign.

Pysche yourself out
Successful investors think they're smart and logical, but they're emotional, too. There's no way to banish the human ego and the pride, fear, impatience and regret that goes with it.

So just be aware, hotshot, that you are human, and consider how your psyche can lead you astray:

Recognize the natural tendency to try to "get even." So don't tie up your money by refusing to sell a losing investment, especially if there are tax benefits in accepting the loss.

If you know you lack self-control, use mental tricks to force yourself to save.

Beware of hubris. Overconfident investors tend to trade too much, hurting their performance in the long run.

Don't be smug, assuming that a one-year or even a five-year track record for a mutual fund or a stock is enough evidence to indicate where the investment is headed next year.

Beware the tendency to follow the crowd. Don't equate "good" companies -- those that show up on most-admired lists, for example -- with good stocks. Popularity boosts prices, so an ugly duckling may be a better value than a swan.

A contest for student stock clubs
No Western New York schools are yet registered in the CNBC-MCI Student Stock Tournament, but any that want to compete for the $17,000 top prize still have until Oct. 31 to sign up.

The Internet-based contest is open to any Grade 4 to Grade 12 student-only stock club affiliated with a public, private or parochial school. Individuals cannot enter.

There are small gifts for weekly winners, and the grand prize of 250 shares of General Electric stock, currently worth about $17,000, to the team that has the biggest percentage gain in an imaginary $10,000 portfolio by Dec. 31.

Go to for information.

Don't have a club? Can't get one organized by the end of the month? A new contest will begin Jan. 1.

Where to get credit card data
RAM Research Group issues a thorough $5 monthly survey of low-rate, no-annual fee cards, gold cards, secured cards and reward cards. Write CardTrak, P.O. Box 1700, Frederick, Md. 21702, or call (800) 344-7714. Less inclusive lists are available free on RAM's Web site at

Bankcard Holders ofAmerica publishes several credit card lists, including a $4 comparison of low-rate and no-annual-fee cards. Send check or money order to 524 Branch Drive, Salem, Va. 24153. For information, call (540) 389-5445.

Bank Rate Monitor offers a comprehensive list of low-rate credit cards, and its Web site ( provides links to banks with low rates. Call (561) 627-7330.

Getsmart is a budding Web site ( that provides free information on low-rate cards, allows you to search its database for cards that fit your criteria, then lets you apply online. The site has limits, but is free.

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