Investment Clubs

Why an Investment Club?

Investment Clubs

Consider starting or joining an investment club if:

  • You're new to investing and are looking for a good way to get your feet wet.
  • You'd feel more comfortable learning about investing with others than on your own.
  • You have roughly $20 to $50 that you can invest through the club each month.
  • You've been putting off learning about investing and sense that having a responsibility to the group would provide some much-needed discipline.
  • You think it would be fun to have a group of people with whom to share company research and to discuss investing topics.
  • Friends have gently suggested that it would be good for you to get out of the house once in a while.
Clubs aren't just good for newcomers to investing, though. Also consider forming or joining a club if:
  • You're an experienced investor, but don't have time to study as many companies as you'd like. (A dozen people studying and presenting one company per month result in 144 company reviews!)
  • You're confident in your investing decision-making, but you think it would help to be able to bounce thoughts of others and get some additional perspectives.
  • You'd welcome the chance to learn from other seasoned investors who have expertise in areas you don't know that much about.

Investment clubs serve as a terrific way for those new to investing to learn more about it in a friendly group setting. Many people are terrified of taking their first investing steps and clubs make this relatively painless, as members cough up modest sums and invest carefully together after deliberating over the pros and cons of any action.

Many members eventually find that the clubs guide their own personal investing. After a while, their equity in the pooled club account may be relatively small compared with their separate personal accounts. Club meetings will offer many good ideas of attractive stocks in which to invest -- and while the club may buy a few shares, members often go home and buy more shares for their own accounts. You may not have the time to research several stocks each month on your own, but by participating in a club, you'll share in the research of others and have the extra bonus of a group setting in which to discuss investing ideas and issues.