| I haven't had what you would call the best track | | | | have their own process for research that they will |
| record when it comes to picking individual stocks to | | | | explain to you. You will probably be expected to |
| invest in on the stock market. I don't want to | | | | write a report about your specific research and |
| sugarcoat it, but I'm terrible at it and that's all there is | | | | present it to the club so that they can determine |
| to say! But at the same time I can't just throw in the | | | | whether or not to invest in that specific company. |
| towel and not invest in anything because I've got my | | | | Once the club has discussed your research (and the |
| retirement to think of. So what other options do I | | | | research of others) in great depth, you can expect |
| have? | | | | them to vote on whether or not to invest in the |
| One option that many people turn to is the | | | | company and you can also expect no action to be |
| investment club. These things are usually groups of | | | | taken unless a vote of the majority rule has been |
| people that have banded together and pooled their | | | | reached. |
| money in order to make investment decisions as a | | | | Many investment clubs are closed to new members |
| group in the hope that they will do better than if | | | | until somebody else leaves the club. A good size for |
| they had invested individually. | | | | an investment club is between 10 to 20 people |
| I've seen some interesting figures in recent years | | | | because much more than that and it becomes |
| that show that most investment clubs double their | | | | difficult from an administrative point of view because |
| money within five years which makes them better | | | | somebody in the club has got to keep records and |
| off than most major mutual funds. I don't know how | | | | create reports that show the clubs investments and |
| much I trust that statistic, but even if it's sort of | | | | how well they are doing at any given time. |
| true then investing in an investment club may be just | | | | The more people that are in the club, the more |
| the thing for you. | | | | difficult it becomes to create the paperwork needed... |
| So what should you expect from an investment club? | | | | so it all comes down to the logistics of the thing |
| Well for one thing you must realize that they are not | | | | which means that clubs should be prepared to stay |
| professional entities, they're not run by professional | | | | small. |
| investors; they are run by people just like you. The | | | | Of course if you're not happy with your current |
| group itself will determine what to invest in and vote | | | | investment club, you can always start your own club |
| on it. | | | | and this can be done quite easily with just a few |
| But what can you expect from the club itself. Each | | | | members and a few dollars each to invest. |
| club should be run like a business in that they have | | | | However your club is run, the important thing is to |
| regular meetings with agendas and officers. Usually | | | | simply join to begin with. Pooled money and pooled |
| individual members will be assigned different | | | | research tends to bring about higher returns and |
| companies to research and every investment club will | | | | really that's all we're interested in, am I right? |