Stock Market Investment Clubs

A good source of financial advice for women?

One source of financial advice for women may be through stock market investment clubs.

Groups of individuals meet on a regular basis for the purpose of investing money in the stock market.

Like individual investors, these clubs now commonly rely on the internet to find the best stocks to buy.

Online investment clubs are also available.


Investing Advice and Support

People come together in these clubs mainly to learn how to invest and gain support in their group investment decisions.

On the other hand, members of self-directed investment clubs meet and learn about investing, but do their own individual investing. Value Investors Club.com is a good example of this type of club.

Kim Kiyosaki, in her book Rich Woman: A book on investing for women has suggested that the social interaction and group support is why there is a growing popularity among all-women investing clubs.

She argues that women learn well from other women as they share with one another - or certainly to a greater extent than men!

So investment clubs may be a valuable source of financial advice for women.


Investing Together

Investment clubs are commonly organized with members contributing money and investing as a group in a single club portfolio.

The regular invested amount from each individual can be quite small. Online communities devoted to this type of investing have contributed to the personal investing boom around the world.

Clubs are generally formed as general partnerships, but could also be formed as limited liability companies.

Specialized investment club software can facilitate the management of a club's books and the preparation of tax filings.


Starting an Investment Club

You may decide that starting an investment club of your own is the way to go. If you do then you might want to start with friends and /or family.

Researching state and federal laws regarding gatherings of people and on investing in general would be a sound idea.

Writing a mission statement that you and your members are happy with should be undertaken before you convene as an official investment club. All members should sign it.

Finally, depending on the size of the group, you may need to register as a business and operate as a limited partnership.

So there are a number of details that are necessary to consider. Obtaining advice from a lawyer and/or an accountant should also be on the list.


In Summary ...

Investment clubs make it possible to get into the stock market without a big initial investment. They offer the structure and support that many people require to be able to start investing in the stock market.

Whether a club would be useful from a value investing point of view would depend on the overall attitudes of the members regarding the investing approach they are prepared to adopt.

This should be made clear and agreed to in the mission statement.

I don't belong to an investing club ... but are they for you?

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