Come and Join the Club
Do you feel the only way
to play the stock market is with loads of money?
Or, do you feel you do not know enough to make decisions on your own,
but do not want to rely solely on a broker?
One solution to these problems is an Investment Club.
clubs are a great way to pool resources and learn about investing. Absolute
beginners to the stock market can join or form a club and develop a
methodology for investing. In the past five years, investment clubs have
enjoyed unprecedented growth in the United States. The number of clubs that
are members of the National Association of Investors Corp. (NAIC) has
tripled since 1993, and there appears to be no slow-down in sight.
investment club is a group of people who pool their money to make
individual investor joins the other members; the group researches different
opportunities; and they buy or sell based on a majority decision.
with anything involving personal finances, make sure you know what you are
doing before committing any of your money. Investment clubs usually do not
have to register with the SEC. But, since each investment club is unique,
each club should decide if it needs to register and comply with securities
securities laws which may apply are:
Securities Act of 1933, under which membership interests in the
investment club may be securities. If so, the offer and sale of
membership interests could be subject to Federal regulation.
Investment Company Act of 1940, under which an investment club may be an
investment company, and regulated.
investment clubs are organized as general partnerships. They are the easiest
and most economical entities to form, operate, and maintain. The club's
income or losses are "passed through" to its partners and are
reported on their individual tax returns. Although partners may be
personally liable for the debts of a partnership, a successful investment
club should not incur obligations that exceed club assets.
of investment clubs vote on administrative matters and whether to buy or
sell stocks. There are two common voting methods:
A weighted vote is
accomplished by each member voting their percentage of ownership of the
club's assets. If we assume that the club's assets total $20,000.00. Member
A's capital account is $1,000.00. Member B's capital account is $2,000.00.
Member A has 5% of the voting power and Member B has 10%. The waited vote is
the recommended method, however, the members of a club should decide which
is best for them and specify that method in their partnership agreement.
that we perked your interest in investment clubs, you may be asking, "how do
I join one?" Two options
are available to you; you can join an existing club or form a new one.
provides a listing of investment clubs sorted by state.
provides a list of investment club web sites, also sorted by state.
you wish to look into starting a new club, the
offers thorough information on forming a club.
Disclaimer - The information contained in
the documents in this website should not be construed as an offer to
sell, or a solicitation to buy, any securities referred to herein.
The information is considered reliable, but not guaranteed as to
accuracy or completeness. TheStockAdvisor specifically disclaims
any liability in connection with the documents and/or information
contained within this website. See complete