A few months ago, I wrote a post about How To Start An Investment Club. I listed 10 steps that you can follow to start your own investment club. I am a big fan of investment clubs and am a member of a couple myself. Here are a few of the advantages that investment clubs offer.
Advantages Of Starting An Investment Club
You Can Pool Your Resources
Investment clubs give you the ability to invest in stocks and mutual funds that you would not be able to invest in as an individual investor. For example, 1 share of Berkshire Hathaway alone would cost you over $130,000. That’s a hefty sum for just about any investor. In an investment club, you can divide the stock price amongst all of the investors. You would only have to come up with $13,000 a piece in an investment club of 10 people. That’s still a large sum but much more manageable.
You can invest in mutual funds with higher minimums and get access to bond funds that require larger minimum investment amounts.
You Can All Learn About Stock Investing Together
One of the most enjoyable experiences that you can have an investing club is watching other investors increase their investing knowledge as the club grows. I always like to have the investing clubs that I join read a book together. This is a way of bringing beginners investing on the same page as those that have been investing for awhile. In every meeting, we will discuss a few chapters of the book and apply that knowledge to our investment selections. This helps each investor form a fundamental understanding of the investing process.
You Will Learn Something New
The great thing about investment clubs is that you can learn some investing knowledge that you can apply to your own personal portfolio. I have always learned something new in every investment club that I have joined. I have often come across different stocks that weren’t even on my radar at the time. One thing that I have learned over my years of investing is that no one person knows everything about stock investing. You may learn a new approach or get a fresh outlook on a security in an investment club. As long as you keep an open mind, you can always learn something.
You Get To Network With Like Minded Individuals
Don’t discount the socialization aspect of investment clubs. There are a lot of personal conversations that take place before and after investment club meetings (sometimes during!). These conversations are great for catching up and networking with other people. Investment clubs are great for making connections and building long lasting relationships.
Don’t forget the cheesecake and other food items that are eaten at meetings!
Have you joined any investment clubs? If so, what was your experience?