The Benefits of Joining an Investment Club
Investment clubs can be a great way to get your foot in the door with investing, and learn about the process as well. There are two main types of investment clubs, virtual investment clubs and clubs that put forth actual money.
If you are brand new to the stock market and a little timid about investing your hard earned dollar you might want to consider starting with a virtual investment club. Virtual investment clubs are perfect for those who want to learn and practice stock market concepts without risking their money. These clubs act like an investing school and teach strategies. Virtual investment clubs can be found online, such as MarketWatch’s Virtual Stock Exchange, and at many universities. Virtual investment clubs give participants familiarity with financial terms and financial institutions.
Many virtual investment clubs that are held offline hold speaking events. At these events, the club invites investment relations representative and brokers to speak to their students about the services they can offer.
Students also study the Wall Street Journal and learn to read the stock market pages in investment clubs. Often the club will discuss current events and their perceived impact on the stock market.
Once you have a firm hold on stock market concepts and practices, you might want to consider joining an investment club that invests money collectively into the stock market. This second type of investment club allows the group members to have more leverage in the market than if the members had invested individually. The investment club forms a legal partnership between the members so that they are all protected.
The National Association of Investors Corporation (or NAIC) is a non-profit organization that helps investors start and maintain clubs. The NAIC offers accounting software and special services to their members to help them run their investment clubs. To find an investment club in your area, you can contact the NAIC.
Once an investment club has been established they will open a brokerage account with a firm of their choice. A treasurer is appointed for the club to maintain and report tax information of each member.
Investing with a club has many advantages over investing alone. When you are part of a investment club, you are able to gather different opinions on stocks. Each investment becomes a group decision and the variety of experiences and knowledge of the group members come into play. The members gain a broad perspective on the market, and the ability to spread their money over a variety of stocks. It allows individuals to own a portion of several companies.
Whether you choose to start virtually or invest your money, investment clubs offer individuals the knowledge to invest wisely. The clubs are perfect for beginners, or those who want to have more leverage on the market.
