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Were Beardstown Profits Inflated?

The Beardstown Ladies investment club has gained fame for its folksy financial prowess, but its fortune may be overstated, according to published reports.

A disclaimer in the 1996 edition of "The Beardstown Ladies' Common-Sense Investment Guide" says the Illinois club's investment returns include monthly membership dues paid by its members, which "may be different from the return that might be calculated for a mutual fund or bank."

The Beardstown Ladies say they aren't sure how the disclaimer got into the book or if the dues really are included in their investment returns, The Wall Street Journal reported Friday. The disclaimer was first cited in an article in the current issue of Chicago magazine titled "Bull Marketing."

The Beardstown Ladies' book covers a decade in which their annual investment return was reported at 23.4 percent. During that time, their monthly dues averaged $400, for an annual total of $4,800. In some years, the club's portfolio was around $30,000 to $40,000, meaning the inclusion of dues alone would create double-digit returns, the Journal said.

Betty Sinnock, the club's treasurer, initially denied that dues are part of the investment returns, but later said she is uncertain, the Journal said. Any mistake, she told the paper, likely was due to incorrect use of a computer program.

©1998 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed

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