One of my favorite albums is Like Water for Chocolate (shout out to my Chi-town family). If you know the album there’s a track called The Questions that I really dig, the following article addresses the questions you should ask when considering investment clubs. Investment clubs have been around for decades and have helped everyday folks like you and I learn about the investment world and advance financially (hopefully). Investment clubs across the globe hold more than $175 billion worth of equities and the clubs invest more than $50 million per month. Please, please, please remember that investing in securities does carry risk, you can lose money and we are NOT giving advice about what specific securities to buy or sell (sorry for the bold typeâ€â€we gotta cover our ass-ets)
What’s an investment club?
An investment club is a small group of individual investors who come together to learn, share investing experiences and help each other become more successful investors. The group usually meets once per month to review companies that have been researched by individuals in the club and decide where best to invest. Usually the club members contribute a portion of money each month that is deposited into a joint account. This contribution usually begins at $25 per person per month but it is really up to the members of that club. The good investment clubs also focus on learning not just investing, they elect an education officer who coordinates learning about new investing ideas and suggests books or magazines to read. Almost as important as the investing and learning is the fun factor. Trust me; discussing P/E ratios and balance sheets is a whole lot easier once you’ve had a couple beverages of your choice.
Why an investment club?There are a number of reasons to join/start an investment club. Maybe you want to learn about investing. Maybe you want to make your money work harder for you. Maybe you just need some friends that talk about more than just pop culture and celebrity gossip. Here are some others:
- You’d feel more comfortable learning about investing with others than on your own.
- You have roughly $25 to $50 that you can invest through the club each month.
- You think it would be fun to have a group of people with whom to share company research and to discuss investing topics.
- 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.
Next week we will cover How to Start/Join an investment club and some things to look out for. For more information on investment clubs check out www.better-investing.org and www.sec.gov/answers/clubs.htm
Check us out for more articles designed to help you get your money right at www.urbanmoneyonline.com
MoneyQs » Blog Archive » Investment Clubs - Part I
[...] James wrote an interesting post today onHere’s a quick excerptInvestment clubs across the globe hold more than $175 billion worth of equities and the clubs invest more than $50 million per month. Please, please, please remember that investing in securities does carry risk, you can lose money and … [...]
September 18, 2007 at 8:41 am
ETS
Good stuff man. Never heard of these. Although I’d be a bit nervous about joining one. I’m not that informed when it comes to investing, so I dont have many tips to offer. Plus I trust the advisors I have now. I’d hate to leave them for people like me.
September 19, 2007 at 11:45 am
Dash
ETS — The beauty of investment clubs is that you don’t have to have a lot of investment knowledge. That’s actually the best by product of joining/starting one. Props on finding an advisor you trust but its always good to know a little bit about the game you are playing.
September 19, 2007 at 1:04 pm
Dav K.
Dash you kinda confirm ETS’s concerns. Why would anyone want to join a club filled with people with no knowledge?
September 19, 2007 at 6:10 pm
Dash
It’s the premise that you learn by doing. You don’t have to be Ben Bernanke or Warren Buffett to be a good investor, as a matter of fact you probably know more than you think right now. A good portion of picking investments is common sense. Investment clubs give the opportunity to discuss investments rationally and deliberately. Most investors fail because they buy and sell with emotion. Investing is a process based on fundamentals and information–larger groups can (usually) see past the noise and ask the tough questions.
September 20, 2007 at 12:07 pm
Investing » Investment Clubs - Part I
[...] david wrote an interesting post today onHere’s a quick excerptYou’d feel more comfortable learning about investing with others than on your own. You have roughly $25 to $50 that you can invest through the club each month. You think it would be fun to have a group of people with whom to share … [...]
September 24, 2007 at 2:20 pm