Investment clubs...anyone in one?

[Mary Webber]

A group of women in our town is thinking of starting an investment club, everyone kicking in an initial $1,000. I haven't heard much detail yet, but if it's done right, I'm sure it could be good. How do you know what to look for in the set-up, etc??

[lazy23]

I've never been a part of an investment club before but I do play a lot of fantasy sports games.

Maybe they can get some practice by joining those online stock simulation games. That way they can learn the ropes and figure out which person is the most knowledgeable abut stocks.

[Mary Webber]

That's an interesting idea. When I glanced up from writing this I noticed an ad above for "Investing Clubs" from Investors Daily, my favorite financial newspaper. I'll have to check that out, AND I guess I'll head to the library later today. Isn't it funny that nowadays the too-much-information can be just overwheming...

[financepro]

What type of activities you have planned to do in the club?

[Mary Webber]

From what I understand, there's a once amonth meeting to decide whether to move any stocks, buy, sell, etc. set limits and stops. I'm not sure how the initial investment decisions will get made or by whom. I've got to find some books or srticles about this whole thing. I"m on the fringe of this so I'm probably only getting snippets of information...

[financepro]

Thanks for the reply.

[Mary Webber]

Well, discussing this proposal further with the women involved, it seems that one is to be the "agent" for the rest, running an E*Trade account in her own name for the benefit of the club. I really question this idea... is that even legal? How can the other participants protect themselves?

[fletcher88]

Originally Posted by Mary Webber

Well, discussing this proposal further with the women involved, it seems that one is to be the "agent" for the rest, running an E*Trade account in her own name for the benefit of the club. I really question this idea... is that even legal? How can the other participants protect themselves?

I think you have to register your group and an entity for tax purposes. This sounds like a fun idea but I think you should get together and discuss, but have your own accounts

Fletcher

[lynnor]

Just browsing forums and thought I'd chime in.

I was part of a "pretend" investment club. Pretend in that we didn't want to put actual money in, but we met and presented stocks and why we thought they'd be a good buy, etc.

Better Investing is what we used and they have a good network (most members are in clubs), they've been around for decades and they would be good to use as a guideline, have good info on setting up and maintaining a club, etc (and taxes, etc). It can get quite complicated, which is why we didn't put actual money in as a club (but some of us bought on our own based on info at the meetings).

[lolCoin]

do it better