Opening An Investment Club

Investment clubs are soon turning out to be one of the most popular ways of trading in stocks. By becoming a member of an investment clubs, an individual gets the opportunity to known about different companies and industries as a whole. They get to learn about how the stock market functions and which areas are worth investing in. Apart from this, these clubs also act as a source of social gathering to take time out from work and relax with people who share the same thought process.

If you are thinking of starting an investment club, the below mentioned tips would come handy.

a) Before launching the club, it is necessary to evaluate the interest levels of those who would be allowed to join the club. A club can comprise of only the elite in investing or those who are only starting off. The best however would be to have a mix of both so that the experts can impart their knowledge to the new blood and also gain from them.

b) Once the type of investment club has been decided, it is time to recruit. Contact people who have the requisite interest and try to get them to join the club. People who have long term investment schemes are the ones who are most likely to join.

c) An investment club comprising of 15 — 25 members if apt for starters. Having too few members would not solve the purpose with respect to knowledge bucket. Not only this, but also the fact that fewer members would mean lesser amounts to invest. On the other hand, having larger numbers of members could lead the club astray from the desired objective.

d) Before actually starting the process of investment, it would be wise to call a meeting and consult them on the name of the club, the objective i.e. the mission statement, who gets what responsibility and the operating agreement (this is an agreement signing upon which, the member agrees to abide by how the club functions or operates). Undertaking these processes would avoid conflicts in the future.

e) Terms and conditions mentioned in the operating agreement should be such that it attracts other people to join the club. The idea is to encourage the members into investing and not repulse them. For example, you may include a onetime joining investment amount of $1000 and then require them to contribute with $100 — $500 on a monthly basis. This would both be affordable and manageable for many to join.

f) People who are assigned with responsibilities such as keeping the books, keeping an eye on the market, managing the inflow and outflow should be those who are dedicated. They should be made aware of their responsibilities well in advance so that they don’t do any mistakes.

g) Members should meet once in a month or two to be made aware of the proceedings. The meeting agenda should be forwarded to them well in advance so that they come prepared. All inputs given during the meeting should be given due consideration and taken down as minutes of the meeting for future reference.

By making note of all the above mentioned points, the success of an investment club is eminent.