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What Is An Investment Club?

Investment clubs are very popular, and are not new. There are thousands of individuals who are investing through clubs, and many find a great deal of success. Investment clubs have been around for about one hundred years in the United States, as well as existing in other countries.

Investment Clubs are formed from groups of people who share common (hopefully) investing goals, as well as perhaps enjoying social activities together. These groups are usually fairly small, and may have between 7 – 15 members. Members meet monthly, either online or at a member’s house or other location.

Investment clubs are not get rich quick or pyramid schemes. Clubs often invest in stocks or bonds for many years before liquidating assets, and patience is required. Club members also spend a lot of time learning about individual companies and stocks before the club invests, and belonging to an investment club can be very educational. Clubs also rarely add new members, often starting out with the right amount of members for the group, and only adding new members if one member leaves, and thus are not pyramid schemes, which would require a constant influx of new members.

How does an Investment Club Work?

An Investment Club works pretty much like any other club, although it is important to remember that it is a business. There are rules, meetings, officers, and expectations.

Members are expected to participate in a variety of ways, including:

• Members might host meetings if an outside meeting place is not decided upon
• Attending meetings
• Paying dues (in this case, monthly contributions)
• Learning about a particular stock or reading a particular investment magazine
• Some members will hold positions and lead meetings

What makes an investment club an investment club and not a regular social club is its stock portfolio. Each investment club holds a portfolio of stocks in companies that members have chosen according to the club’s philosophy and the research done by the members.

What is the NAIC?

The NAIC is the National Association of Investors Corporation. This is a not-for-profit organization that helps individual investors invest, as well as helping investors set up investment clubs. It is a good idea to join, although there is a small annual fee per club as well as a one time per person fee involved in joining. This is easily made up for with the services and discounts the NAIC can offer its members. NAIC members typically make above average returns on investments.

The NAIC offers a variety of services and advice for investment clubs as well as individual investors, including a stock purchase plan which helps members buy stocks. This plan can help keep brokers fees to a minimum. As well, the NAIC provides accounting guidelines which may be useful in dealing with the other money issues your club may need to deal with.

The NAIC also publishes a guide to help you start investing, which you can print out or send away for, and which is a useful document at your investment club’s first meeting, so that everyone can get the same information. This guide is the NAIC’s Official Guide to Starting and Running a Profitable Investment Club.

The NAIC also offers individual investors the ability to gain some level of protection against fraud within the investment club.