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Learn the value of investing with others by starting an investment club.

 

 

BENEFITS BEYOND MONEY: THE VALUE OF INVESTMENT CLUBS

 

If you’re looking to start investing in stocks but want to expand your knowledge, increase your buying power and gain new friends then an investment club could be just the right avenue to get you started on the right track to your investing future.

 

Here is an introduction to investment clubs:

 

 

 

 

 

 

INVESTMENT CLUBS

 

What is an Investment Club?

An investment club consists of a group of individuals who place their money into a collective pot in order to purchase stocks as a group investment. Most clubs will buy stocks only after a period of study of a particular company and with a majority vote of the membership. Members may be responsible for researching particular stocks, arranging for a guest speaker, or compiling financial reports.

 

So what are the advantages of belonging to an investment club?

 

Increase the pace of your learning

An investment club with 8 members doing research is bound to provide a faster learning curve than what you could learn solo.

 

Reduce your investment risk

By pooling resources, club members can purchase a larger amount of stock at less personal risk.

 

Gain the knowledge needed before going solo

Many club members do choose to invest their own funds but find that they make better informed decisions about stock purchases from the knowledge gained through participation in an investment club.

 

Develop new friendships

Like most clubs, investment clubs can offer not only the opportunity for education but also for new friendships. Most investment clubs are not required to register with the U.S. Securities and Exchange Commission however it is a good cautionary step to check with two federal laws: the Securities Act of 1933 and the Investment Company Act of 1940 as well as checking for the laws of your state under the office of the state securities regulator.

 

An excellent resource for the creation and how to ensure their long-term success is the National Association of Investors Corporation. Of course, it’s not necessary to create an investment club which requires actual purchase of stock. An “educational only” club can be created and members can pool their resources for the benefit of learning together while any stock purchases are left to individual investors. No matter what type of investment club you might pursue, the learning gained from an investment club is one of the best returns you’ll ever get in terms of friendship and learning.

 

 

 

For teaching and learning about investing:

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