| Have you always wanted to enjoy the sort of profit | | | | you believe will do best. Given that there are |
| opportunities that are only possible from stock | | | | hundreds of companies listed on the London Stock |
| market investment - where the average long term | | | | Exchange not to mention all the other stock markets |
| gain has exceeded 10% a year for decades - but | | | | around the world it is definitely a case of 'many |
| been put off by either the complexity or the cost? | | | | hands make light work'. Furthermore, different |
| Or maybe you are already a shareholder and keen to | | | | members of the club may have specialist industry |
| reduce your risks and increase your returns? Either | | | | knowledge that can further boost the chances of |
| way, you should consider becoming involved with an | | | | success. |
| investment club. | | | | This leads to another reason for the popularity of |
| The investment club concept is simplicity itself. A | | | | investment clubs. They are an ideal way for novice |
| group of friends, colleagues or neighbours pool their | | | | investors to learn about stock market investment |
| money in order to invest in stocks and shares. To | | | | quickly and without the worry of making costly |
| get the club started members put in a lump sum - | | | | mistakes. Speaking of costs, investor clubs are the |
| perhaps a few hundred pounds - after which they | | | | least expensive way for a private investor to enjoy |
| each make a fixed monthly contribution. Some clubs | | | | share ownership. This is partly because it is almost |
| call for as little as £100 a month investment, | | | | impossible to buy a worthwhile number of shares |
| others set the limit somewhat higher. Once the club | | | | when you are purchasing them on a month-by-month |
| has sufficient funds it will start to make investments. | | | | basis. And partly because all the costs associated |
| At any point individual members may withdraw their | | | | with buying and selling shares will be divided between |
| cash and a collective decision can always be made to | | | | the club members. What's more, as club members |
| wind the club up. | | | | donate their time and expertise for free, there should |
| As a way of making money, investment clubs offer | | | | be no other expenses such as management fees. |
| some fantastic benefits. | | | | The first ever investment club was founded in Texas |
| To begin with, they overcome one of the biggest | | | | as long ago as 1898 and since then hundreds of |
| problems facing private investors: how to diversify. | | | | thousands of clubs have been established worldwide. |
| The best way to avoid losses and optimise profits | | | | Here in UK investment clubs were relatively rare until |
| when investing is to put your money into a portfolio | | | | quite recently. Over the last few years, however, |
| (or range) of different company shares. There is no | | | | they have become increasingly popular with new |
| magic number of companies you should invest in, but | | | | clubs being started every week. |
| I would have said the absolute minimum was 15. Due | | | | Incidentally, a word of warning about the various |
| to the cost of buying and selling shares it is rarely | | | | companies trying to cash in on the growing popularity |
| worth investing less than £2,000 in any one | | | | of investment clubs. These are generally trying to sell |
| company so for a private investor to even begin to | | | | seminars, software, financial advice or stock broking |
| diversify he or she must have at least | | | | services and should be avoided. There are only two |
| £30,000 - and ideally considerably more. This is | | | | non-profit investment club organisations offering free, |
| a lot of money for many individuals to find but not | | | | worthwhile advice. These are Pro-share in the UK ( |
| for an investment club. For instance, a club with 20 | | | | and the National Association of Investors Corporation |
| members contributing £300 each on day one | | | | in the USA ( Both can furnish information and case |
| and £25 a week thereafter would manage it in | | | | histories. The latter are especially encouraging as |
| under a year. | | | | many investment clubs achieve well above average |
| The next advantage that investor clubs offer is that | | | | returns. |
| the members are pooling more than their money. | | | | Although the key reason to establish an investment |
| Deciding which company shares to buy in order to | | | | club is to make money, there is another advantage |
| maximise your returns is a time-consuming business. | | | | that shouldn't be overlooked. Being part of a club is |
| First you have to select the sectors you are | | | | extremely enjoyable! |
| interested in. Then you have to pick out companies | | | | |