DEFINITION of 'National Association of Investors Corporation - NAIC'

The National Association of Investors Corporation is a non-profit organization dedicated to providing investing education. The association is based in Madison Heights, Mich., and is composed of investing clubs along with individual investors from around the United States.

BREAKING DOWN 'National Association of Investors Corporation - NAIC'

The National Association of Investors Corporation (NAIC), also known as BetterInvesting, is a Michigan-based 501(c)(3) non-profit organization whose aim is to teach individuals how to become successful long-term investors. The National Association of Investors Corporation is an umbrella organization that had around 4,000 member investment clubs and approximately 40,000 individual members at the end of 2015. The original name of National Association of Investors Corporation was the National Association of Investment Clubs.

The National Association of Investors Corporation’s member magazine is called BetterInvesting, and it became the branded name of the association in 2004. The organization was founded in 1951 when five investment clubs formed the national association. Its mission is to educate individuals on the benefits of long-term investing in common stocks. With the popularity of 401(k)s and other defined-contribution retirement plans, education regarding stock and bond mutual funds was added.

Depending on their membership level, members have access to online tools for determining whether a stock is that of a quality growth company and is selling at a price that will provide sufficient potential return, educational webinars, First Cut stock studies contributed by the BetterInvesting community, digital and print editions of BetterInvesting Magazine, local chapter support and other products and services.

National Association of Investors Corporation Investment Principles

The National Association of Investors Corporation stresses four principles for successful, long-term investing:

  • Invest regularly, regardless of market conditions;
  • Re-invest all earnings;
  • Invest in growth companies (and growth mutual funds); and
  • Diversify to reduce risk.

The heart of the National Association of Investors Corporation Investment approach to investing is the third principle -- investing in growth companies. The primary tool to evaluate common stocks is a two-page form with a semi-log graph on the front called the Stock Selection Guide (SSG). The SSG dates to the founding of the organization and was created by George A. Nicholson. The SSG displays a company's 10-year sales and earnings per share history, pre-tax profit margins and return on equity; five-year annual high and low price-earnings ratios and other important information meant to answer two questions: Is this a well-managed company? Is the stock selling at a reasonable price? The last principle was added and emphasized in the 1980s and '90s.

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