During the 1990s, the United States underwent a dramatic transformation: investing in stocks, once the province of a privileged elite, became a mass activity involving more than half of Americans. This title follows the trajectory of this market populism, and examines the origins and impact of the mass engagement in investing.

Acknowledgments ix SECTION ONE: Investment Clubs and the "Ownership Society" 1 Chapter 1: Stock Market Populism--Investment Clubs and Economic History 11 Chapter 2: Investment Clubs as Markets in Microcosm 37 SECTION TWO: Cash and Social Currency: Performance in Investment Clubs 73 Chapter 3: Group Composition and the Business Case for Diversity 83 Chapter 4: Getting Ahead versus Getting Along--Decision Making in Investment Clubs 113 SECTION THREE: Aftermath and Implications 143 Chapter 5: Reflections on Investing in the 1990s 149 Chapter 6: Implications and Conclusions 175 Notes 199 References 215 Index 231

"Superb, remarkably timely, and an extraordinary contribution to several fields. A wonderful study of how groups do and don't work, and a unique examination of how people really think about investments. Prepare to be surprised! Harrington's book is a classic. It will have a major academic impact; it will also get, and deserve to get, a large general readership."—Cass R. Sunstein, Harvard University

"A brilliant idea here: to study investment clubs up close, to observe the transmission of ideas and values at an investor's social nexus. The book provides deep insights into the mind of the market."—Robert J. Shiller, author of Irrational Exuberance and Animal Spirits

"A fascinating study of group decision making in investment clubs. Harrington's insights on the role of gender make important contributions not only to behavioral finance but also to the value of diversity in organizations of all types."—Burton G. Malkiel, author of A Random Walk Down Wall Street

"Although investment clubs in the United States hold hundreds of billions in assets, they have been marginalized by students of the market. Brooke Harrington brings this important corner of the informal economy out of the shadows. Her extensive data and firsthand experience illuminate puzzles such as why mixed-gender clubs perform better than single-sex, how such clubs may contribute to 'socially responsible investing,' and how a close look at these informal decisions helps clarify the nature and limits of market rationality. A major—and elegantly written—contribution to the sociology and economics of markets."—Mark Granovetter, Stanford University

"This is an engaging book on an interesting and important topic. In examining investment clubs, Harrington contributes to our understanding of the growth of individual investors, which is significant in its own right, while contributing to the sociology of financial markets more generally."—David Stark, Columbia University

"This book constitutes the first major study of an important empirical phenomenon in the United States, namely investment clubs. Harrington skillfully introduces the insights of behavioral finance into economic and organizational sociology. She also pioneers the introduction of social psychology into economic sociology. Harrington adds substantively to the growing literature on amateur investors."—Richard Swedberg, coeditor of The Economic Sociology of Capitalism

Superb, remarkably timely, and an extraordinary contribution to several fields. A wonderful study of how groups do and don't work, and a unique examination of how people really think about investments. Prepare to be surprised! Harrington's book is a classic. It will have a major academic impact; it will also get, and deserve to get, a large general readership. -- Cass R. Sunstein, Harvard University A brilliant idea here: to study investment clubs up close, to observe the transmission of ideas and values at an investor's social nexus. The book provides deep insights into the mind of the market. -- Robert J. Shiller, author of "Irrational Exuberance" and "Animal Spirits" A fascinating study of group decision making in investment clubs. Harrington's insights on the role of gender make important contributions not only to behavioral finance but also to the value of diversity in organizations of all types. -- Burton G. Malkiel, author of "A Random Walk Down Wall Street" Although investment clubs in the United States hold hundreds of billions in assets, they have been marginalized by students of the market. Brooke Harrington brings this important corner of the informal economy out of the shadows. Her extensive data and firsthand experience illuminate puzzles such as why mixed-gender clubs perform better than single-sex, how such clubs may contribute to 'socially responsible investing,' and how a close look at these informal decisions helps clarify the nature and limits of market rationality. A major--and elegantly written--contribution to the sociology and economics of markets. -- Mark Granovetter, Stanford University This is an engaging book on an interesting and important topic. In examining investment clubs, Harrington contributes to our understanding of the growth of individual investors, which is significant in its own right, while contributing to the sociology of financial markets more generally. -- David Stark, Columbia University This book constitutes the first major study of an important empirical phenomenon in the United States, namely investment clubs. Harrington skillfully introduces the insights of behavioral finance into economic and organizational sociology. She also pioneers the introduction of social psychology into economic sociology. Harrington adds substantively to the growing literature on amateur investors. -- Richard Swedberg, coeditor of "The Economic Sociology of Capitalism"