Providing Stock Market Basics

Is one role of shareholders' associations

Providing stock market basics is one role of shareholders associations. These organizations, usually run by volunteers, run stock market seminars and represent and assist shareholders in a number of capacities.

This includes help with investing.

Examples of shareholders' associations include

• American Association of Individual Investors
• UK Shareholders' Association
• Australian Shareholders' Association
• American Shareholders

Have a look at a shareholder association that is relevant to you to see what they offer.


Activities of Shareholder Associations

Shareholder associations provide shareholders with advice regarding voting at company annual general meetings (AGMs) and also act as shareholder activists and advocates.

They encourage members and others to nominate them as proxy at Annual General Meetings (AGMs) to maximize shareholders vote so that the views of mum-and-dad shareholders can have more clout.

The greater the number of proxies held by the association means the greater notice company directors take of the association.

Representatives of the association attend AGMs and report back to members. These reports provide valuable insights as to how company executives treat shareholders.

This can vary from downright offhandedness to maximum consideration.


Educational Role

As well as campaigning to protect shareholders rights, these associations provide an important educational role by organizing seminars and talks, or a stock market course for their members that provide help with value investing.

These talks may be provided at the local level, such as AAII local chapter meetings, so that members can interact with each other and with speakers who are engaged to speak on topics of interests.

The American Association of Individual Investors (AAII) offers a range of investor support including ...

• AAII sentiment survey that provides an indication of the state of the market
• AAII journal
• AAII screener
• AAII tax planning guide

Other bodies such as stock exchanges commonly offer a stock market tutorial to encourage investors to become more informed with stock market basics.


Membership Fees

Members pay an annual fee to obtain membership. Depending on your circumstances, the fee may be tax deductible.

As mentioned elsewhere in this website, whether you outlay money to become a member of a shareholder association could depend on what your current annual investment expenses amount to as a percentage of your overall investment portfolio.

I keep this percentage between 0.5% and 2% depending on my current portfolio size.


To Conclude

I am a member of a shareholders association, and this is something you might also consider.

As I am not always able to attend company AGMs, I provide my proxy vote on meeting resolutions to my association who send a representative to the meeting to vote on my behalf.

I also find it valuable to obtain advice from my association regarding which meeting resolutions of the various companies are worth voting for and which are not.

Also, receiving reports on the outcomes of meetings from representatives of the association who attend the meetings can be very instructive and informative.

So being a member of a shareholders association, as well as providing stock market basics, other worthwhile activities for value investing are available.

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