Investment Clubs - Part I

September 18th, 2007 • Related • Filed Under

investment clubOne 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 type—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

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