If two heads are better than one, a dozen heads should be even better still -- particularly when it comes to investing.

Investment clubs can empower you to make the most of your money. According to Consumer Reports, from 1996 to 2006, investment clubs outperformed major market indexes about 80% of the time. That's an extraordinary feat, when you consider that the majority of professionally managed stock mutual funds fail to beat the market.

The BetterInvesting group of investing clubs reports that in its first 15 years, its list of the top 100 stocks owned by its clubs averaged an annual gain of 12.5%, vs. just 10.9% for the S&P 500. Here are a few of the most well-regarded stocks on the list:

  • BP (NYSE: BP). This is members' most divisive holding, with a 10-4 buy/sell ratio. The stock's seemingly low valuation (a P/E ratio of 6, vs. a five-year average of 10) draws investors, but its extremely uncertain future rightly makes them wary.
  • Monsanto (NYSE: MON) This agricultural giant sports an 9-0 buy/sell ratio, suggesting that club members aren't too troubled by the company's falling margins, the generic competition for its Roundup herbicide, and the controversy surrounding its genetically engineered seeds.
  • Schwab (NYSE: SCHW) Schwab's buy/sell ratio is 7-0, with investors likely banking on a boom in business as the economy recovers and investors grow more bullish. Still, Schwab and its peers have been cutting commissions and fees, which will put pressure on profitability.
  • Dell (Nasdaq: DELL) sports a 5-0 buy/sell ratio. The computer company appeals to investors partly because, as the economy recovers, businesses and consumers that have been delaying computer purchases will start buying. (Of course, some think that Dell should focus on higher-margin businesses instead of battling many rivals for consumers' low-margin dollars.)

Why do investment clubs do well? Part of the answer is simply leverage: If you can study one company per month, by banding with 11 others, your group can pool your energy and cover 144 companies per year, or 72 companies twice a year. But group dynamics matter, too. If you're in a group, other members are supporting you and expecting things of you. You'll have a hard time shirking your due diligence if you answer to a group.