Depressing, isn't it? The market is doing very little at the moment, apart from swinging wildly up and down and generally being volatile. If nothing else, any investor (clubber or not) should have learnt over the last month or so that the value of shares can go down as well as plummet.

So, most people can be forgiven for shrugging their shoulders, leaving the market alone and thinking "Blow this, I'll come back in a few months' time!"

But, strangely, this may well be an extremely advantageous time to actually start an Investment Club.

As I said in the previous article, we are approaching what are often seen as the most bullish 6 months of the year. As we approach the year end, most people look to a New Year with optimism, and this is then reflected in the movement of the stock market. Generally.

Right then. Let's say you want to start a club. Or, if you are already in one, why not start another club? The "Family of Clubs" idea was something that I touched on in a previous article, "Keep it in the Family". But how long will it take you to get it off the ground?

Probably about 2 months, to be honest, from the initial discussion (where you decide whether or not to actually go for it) to the time when you can, if desired, make your first purchase. One thing I have discovered is that clubs can get off to a flyer if there is a one-off "joining fee" payable per member. This can be anything, really, but should probably not be too high otherwise novices may be put off. Something between £100 and £500 per person is probably quite adequate. It also depends on how many people are interested in joining and what the level of subscription will be set at. In any event, something like this is going to help kick start your club into action so that purchases can be made while the enthusiasm is high. There's nothing worse than a group of keen clubbers waiting until they have enough to make their first purchases. Really frustrating.

So, this is what you do:

1) Find your fellow members. Friends, family, work colleagues, whoever. Anyone can be a member of an Investment Club.

2) Get the ProShare Manual. This is invaluable in the help and assistance it will give you vis-a-vis Rules, Constitution, etc. Relevant pages can easily be copied without infringing copyright rules.

3) Set a date, time and venue for the initial chat. This is especially essential if it is the first club you have started. There are many questions that prospective members will want to ask and be answered. See who is willing to help in an "official" capacity. Every club needs a Chairman, Secretary and Treasurer. Each position requires a commitment from the member and probably will take between 1 and 2 hours work per month, which must be unpaid. Expenses can however be reclaimed from the club with the agreement of the members. Some discussion regarding the level of subscription (and/or joining fee) should be entered into. Select someone to research banks and stockbrokers that the club can use. Assuming you decide to go ahead, you now need to...

4) Set a date/time/venue for the inaugural meeting. This is when it all starts to come together. By now, there should be three people who are prepared to act as Club Officials and they need to be formally voted in by the members. The Secretary should have prepared an Agenda (a sample can be found in the ProShare manual). You can discuss what broker and bank you want to use and formally elect them as well. The Treasurer should be able to provide standing order forms for each member, or use the blank pro-forma ones provided within the book The Fool's Guide to Investment Clubs. If you have also decided on a joining fee and monthly subscription, then be prepared to pay the money at this time. The Rules and Constitution will also have to be formally adopted. Oh, and decide on a name for the Club as well!

5) Find a regular venue. Not as easy sometimes as it might appear. Pubs are good, but you need to find one that is either uncommonly quiet or that has a separate room or area that you can meet in so that all members can be heard without competing with Man Utd v Juventus or the fruit machine.

The rest is up to you. The Fool's Investment Clubs discussion board is full of queries from new clubs about various problems they have encountered, and most clubbers are more than willing to pass on the benefit of their experience. The rules of your club are there to be set by you -- the ProShare ones are a guide only. But remember that money can cause arguments and disagreements between even the greatest of friends, so it is probably a good idea for everyone to agree that friendship is worth more than a few quid each month.

So, what are you waiting for? Strike while the iron is hot and the market is low. Get Clubbing!

Fool on!

Where Next?

• Investment Clubs discussion board
• The Fool's Guide to Investment Clubs
• Fool Books -- The Fool's Guide to Investment Clubs

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