Stock Investment Clubs – Advantages and Disadvantages

Investment clubs can be a great experience for the novice investor. In these investing co-ops you’ll find a broad spectrum of investors, some of them very experienced, all sharing a common goal to increase their equity. The best part of joining an investment co-op is the different perspectives gained from the other members of the group. Clubs can be inexpensive, some as low as $20 a month.

However, it can be difficult finding a club with open memberships. The best option is to seek an invite from an acquaintance who is a member of an investment club. Other options in finding an invitation include posting in business blogs and forums stating your desires to join.

Successful investment clubs, with average member’s equity amounting to thousands of dollars, oftentimes only require the standard monthly investment contribution from new members. The longer an investor retains his membership, the bigger a piece of the pie is earned in the long term.

Once you have some prospective clubs worth investigating, make sure the group has the same investment goals that you do. What is the group’s investment style? Are they composed mostly of under-40 aged investors and taking an aggressive investment stance? Are the members retirees and seeking safe investments? How cohesive is the group? How willing is the group to listen to new ideas? Where does the group get its investment research? Also, make sure the group is set up correctly. Find out who the treasurer is and make sure the proper tax forms are given to members in a timely manner. Make sure the group is well-organized.

Once a good investment group is found, join and participate in the group’s actions. Offer to do some research on prospective investments. Attend the meetings and participate. The best way to learn is through experience.

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