WHILE many investors are struck dumb and glum by the sorry state of the FTSE index, members of the Riding Investment Club Holdings are feeling snug - and even smug.

Their RICH units have actually gained a bit on last month. All right, so it was up a modest two pence to £2.64, but at least it made up for last month's hiccup on their boast that they are disappointed if they can't beat the market, which in this instance dropped by several per cent.

One of the reasons for being untouched by prevailing August gloom was that the club's stop loss system automatically kicked in.

As a result members sold Arcadia at 245p, realising a substantial profit of 216 per cent over the buying price of 76p last November.

Jim Porteous, chairman of this group of existing and former Nestl managers has no regrets. He says: "Remember, a stop loss system is there to protect profits as well as limit losses.

"A large number of investors suffer from a reluctance to take profit and it's surprising how the old adage, 'leave something for the next guy' is wise comfort when realising a profit.

"Better a modest profit taken than an enormous one lost."

And with that in mind the intrepid investors decided this time round to make only two amendments to those 'sell triggers' - the first being British Aerospace, which will be flogged if it drops to £3.40 and Jarvis if it falls to £4.

Otherwise, apart from agreeing to lift the stop loss from Minmet all stop losses remained as previously agreed.

Meanwhile RICH members were awash with cash from the stop loss sale plus the cash left over from last month.

Remember how they spent only half the available funds given the uncertainty?

Well, they were just as prudent this time around - again agreeing to invest only half the available funds and this would be in proportions of 33 per cent "high risk" and 66 per cent "safer".

Whichever they would choose would be a matter of risk - with the possibility of shares losing as well as increasing in value, but they interpreted Torotrack as the boom or bust stock.

Tototrack is a powertrain engineering group specialising in the design, development and licensing of infinitely variable transmission systems for production by vehicle or transmission manufacturers.

Just lately its shares have been highly valued in anticipation that it will do well. and members reasoned that if the company did hold on to its licensees long term and its product becomes successful then the company would expand with a healthy share price.

They interpreted the 'safer' stock as that belonging to Compass, the well-known food service group which was part of Granada.

Compass' first half trading was in line with expectations and it now hoped it would benefit from the integration of its UK businesses.

The market's pleasure in the news coincides with Deutsche Bank upgrading the stock from 'underperform' to 'market perform'.