Joining an Existing Club
Most investment clubs occasionally seek new members. Perhaps a member is moving away or is just unable to continue or -- dare we say it? -- perhaps a member has passed on to the great stock market in the sky. At times like these, new members may be invited to join.
You might expect that if a club's account has grown over a decade and its average member's equity is in the thousands of dollars that a new member would be expected to contribute a huge sum of money in order to join. Not true. The accounting systems that most clubs use permit new members to merely begin contributing the standard monthly amount. Longer-term members will each retain bigger pieces of the pie, and everyone's piece is calculated according to how much was contributed when.
Now that you might be all fired up at the prospect of joining an existing club, we'll hit you with some bad news. It can be hard to find the right club that's looking for a new member. Members of many of these clubs probably already have some friends they plan to invite. Your best bet might be to ask people you know whether they are in an investment club, and whether they need or anticipate needing any new bodies.
Alternatively, you can hit our message folders. Go to our Folly in 50 States area and post a message in your state's folder saying that you're looking to join a club. One more option is to head to bivio, where its "Connect" feature can help hook you up with others interested in starting a club.
Once you find a club to join, take the time to learn more about it before signing up. Consider questions such as the following:
- Do you get along with the other members? If many of them seem too quiet, loud, obnoxious, young, old, aggressive, meek, or wishy-washy, this might not be the best group for you.
- Do you have goals in common? Perhaps you're risk-averse and want to invest in more stable blue-chip stocks, but they're out to aggressively find volatile, quickly growing small companies.
- Is the regular contribution too steep for you? $60 per month, for example, means $720 per year. This can be a lot for some people.
- Do you have the same basic investing philosophy? If you're a true Fool, you probably won't want to belong to a club that relies mainly on technical analysis or that just looks for stocks that are going to split, or doesn't do its own research, preferring to rely on the recommendations of gurus on television or in magazines. (Yuck!)
Look for a group where you'll fit in.
That's easier said than done, though. For many people, the best strategy is simply to start their own club.