After tentatively forming online around a year ago, the Bradford Grads investment club decided to make their first foray into shares by buying into Boots (BOOT) last summer. As an investment it proved a complete failure, but as a lesson in the volatility of the stock market, it was perfect.

At the time, the club members thought that there were sound reasons for investing in the retailer. "They're a well-established name, should profit from the baby boom next year, and from the increasing number of people with hay fever this year, and the annual flu epidemic in the winter. The demand for their products must be pretty constant," wrote Bradford Grads founder member James Richardson last year.

Now he has a different view of the stock. "It's a dog," he says.

The club bought 57 shares in Boots at 696p at a total cost, including dealing charges, of £411. As of this week the price stood at 500p, leaving the club's holding worth just £303. "It was a horrible share to buy," James conceded, but even so is looking to make up the loss by investing in a "hot tip".

The club is also looking at a paper loss on one of its other transactions. Earlier this year they bought into Vodafone Airtouch (VOD) at 346.5p. Its shares now stand at 257p. However the stock has been volatile all year as the many other clubs who bought in are aware.

The Bradford Grads bought shares in the Digital Animations Group (DAG), which develops interactive games for PC and CD-Rom. They paid 214p and quickly saw the price rise by 104p, to give them a 41% gain. This seemed to justify their purchase. But a couple of months later the share has suffered with many others in the sector and now stands at 154p.

The club members are reasonably sanguine about their fortunes. "We are not really interested in short-term fluctuations," says James Richardson. "We are thinking of getting risd of boots, but we bought Vodafone as a long-term investment. This is very much a long-term venture and we will rise over any short-term losses and hopefully benefit in the future."

The club's other buy has fared a little better so far. Earlier this year they bought into BT (BT/A) at 972.25p. Since then it has firmed up and currently stands at around 1,000p yielding a small but growing profit for the club.

As their name suggests, they are formed largely from graduates of Bradford University. However, the seven members are actually spread all round the country. The club was set up a year ago but didn't actually have a meeting until the end of January. Until then progress had all been done on-line with club chairman James Richardson co-ordinating activities.

Why did he set up a club? "I was interested in investing, but looking at my disposable income, I realized I couldn't afford it and that forming an investment club was a much quicker way of reaching the stock market," says Richardson.

In the future they plan to diversify. "We are striving to build up a portfolio of holdings across the sectors and markets, including AIM and investment trusts," says Richardson. Before doing so, they are becoming more informed about the different investment opportunities open to them.

Last autumn, club member Alistair Lanfear attended a ProShare investment club seminar, when he sat in on a presentation about investment trusts. " I didn't know what these were," he admits. Afterwards he was enthusiastic about them. " Basically their big selling feature is that they are very low cost," he said.

Their next meeting is to be held in July when the members will gather in London once again. They will certainly have a lot to talk about, but their experiences so far should stand them in good stead for interesting investing times ahead.

Simon Read is a personal finance writer at UK-iNvest.com

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