By forming an investment club you can begin the journey
of learn-by-doing investing! Better yet, you can enhance
your knowledge of investing and business, accumulate considerable
amount of capital over time, and hopefully enjoy yourself.
I attended my first investment club meeting years ago
and immediately became enthralled with the whole idea
of business investment and trading stocks. This group
of women, of my Mother-in-Law Sue's long established club,
not only had by-laws and elected officers; they discussed
P/Es, debt ratios and S&P data as effortlessly as some
might discuss last week's episode of Grey's Anatomy.
I was hooked.
Establishing a new investment club may not be as difficult
as you think. While there are some specific requirements,
like government forms to establish the club and broker
account options, everything else can be exclusive to your
particular situation. The first thing I did was contact
a few friends and acquaintances. Each person was asked
to bring one other interested person to an organizational
meeting. This way you get a variety of club members, not
just close personal friends. We discussed possible Club
names; reviewed draft by-laws obtained from an established
club, and discussed meeting times and required monthly
contributions. Once a Club name was selected, I applied
for an EIN number with the IRS and Bristol Investment
Club was born! We contacted a broker, opened an account,
signed our by-laws and started buying stocks. That was
nearly fifteen years ago……
I am proud to say Bristol Investment Club is
still going strong. We've had our moments of triumph over
the years, as well as some major disappointments (Enron--who
knew?) but we persevered and, most importantly, learned
and profited from it all. As the club's Treasurer since
inception, I can assure you the club books have evolved---from
a simple Lotus spreadsheet to an elaborate unit-based
software package---and I would be happy to suggest software,
provide an outline to help you get started, or answer
any questions you might have regarding investment clubs
in general.
Did you know that when clubs form, normally only a few
members own personal portfolios? After four or five years,
almost all members do. What you learn will help with those
401(k) retirement plan accounts, too. Don't be left out…..
Happy investing!
A couple of useful websites for the
would-be investment club are the National Association
of Investors Corporation at http://www.better-investing.org/Public/default
and IClub Central at http://www.iclub.com/.
Marlene M. Mason
mmason@mspotter.com
POTTER & COMPANY, LLP
