Ever thought of joining an investment club? If you haven’t maybe you should, if you don’t know any you can start your own. Investment clubs are a great educational and social medium. If you are interested in learning more about investment and understanding the investment world, joining and investment club can be of great value. If you know an investment club near you I suggest contacting them and attending couple of meetings to get to know the club and then joining.

How do Investment Clubs work?

Investment clubs function very similar to any other club (book clubs, chess club etc). Usually it is registered as a partnership and every member pays a registration fee as well as a monthly fee, these fees are first used to pay oinvestment-clubf any costs associate with running the club (bank fees, meeting rooms etc) and the remainder is invested. There usually is a meeting ones per month where members go over current investments, discuss current markets and opportunities, present an investment idea and either decide to vote on it or do further research on it. If it is decided to purchase or sell an investment the person responsible for the execution will make the trade and inform everyone of the cost. There is a partnership agreement, by-laws and code of ethics that all members must obey by. However investment club can be much less formal with irregular meetings and no fixed investment amounts.

Benefits of Investment Club

There are many benefits to an investment club, I will just highlight a few here.

1. Learning as a group

You will be part of a group of 5-15 members with everyone having a different level of knowledge, this can help everyone in understanding investments. You divide tasks among each other and research will be less overwhelming.

2. Spread investment risk

If you are new DIY-investor there is a great chance that you will loose some money at early stages until you learn more about the markets, this can be a very expensive lesson. However in an investment club the risk is much lower as it is shared with other members, you could learn much more with a lot less risk.

3. More resources

Being part of the club you can access and enjoy the resources available to the club, investment clubs generally will have invested in some educational and research tools and resources and as a member you can have access to it.

4. Networking

A great part of life is networking with like minded people and what better way to find like minded people than joining an investment club? These people can also help you in your personal situations and function as a “counselling group” during bad times like these. Many times we have had members come in at meetings and discuss how they don’t understand many of there investments, we took time to discuss them and help make decision regarding it’s appropriateness they always felt much better when leaving.

Our Investment Club

About a year ago I had many friends/clients who wanted to understand more about the markets, but I could not find an investment club so I decided to start one. There is a lot of paper work involved in getting it going, but we finally got things going in about 4 months. Since many of our members were students we decided to start small, initial fee of $150 and monthly fee of $40. Currently our portfolio is down a little over 30% and overall the club is down about 45% mainly due start up costs (business registration, software, banking etc.) So far it has been fairly informative and many members have learned quite a bit about investments, several have opened their own discount broker accounts and started investing small amounts. We are currently not accepting any new members.

I encourage everyone to find and join an investment club, even if you are a DIY investors you can benefit from and investment club. However if you can not find a club near you just recruit some people and start your own. Investment clubs can be as formal as you want it or as informal as you want it to be.

If I see there is enough interest I will do a follow up post about starting your own investment club.

Are you part of an investment club? Ever thought of joining one?


Ray is an ex-financial adviser and the founder of Financial Highway. Currently working in the financial industry and working towards completing his Chartered Financial Analyst, CFA, designation.