Investment clubs serve as a terrific way for those new to investing to learn more about it in a friendly group setting. Many people are terrified of taking their first investing steps. But investment clubs make this a relatively painless experience. Members cough up modest sums and invest carefully together after deliberating over the pros and cons of any action.
A first step
Many members eventually find that the clubs guide their own personal investing. After a while, their equity in the pooled club account may be relatively small compared with their separate personal accounts. Club meetings will offer many good ideas about attractive shares in which to invest — and while the club may buy a few shares, members often go home and buy more shares for their own accounts.
You may not have the time to research several shares each month on your own, but by participating in a club, you’ll share in the research of others and have the extra bonus of a group setting in which to discuss investing ideas and issues. Thus after a while, your club may have the additional benefit of becoming a mini-Motley Fool — a forum to discuss investment ideas and issues.
Here’s a brief summary of why you should consider starting or joining an investment club:
- If you’re new to investing, it’s a good way to get your feet wet.
- If you’d feel more comfortable learning about investing with others than on your own, then this is for you.
- It’s a good way of putting aside a small amount each month, if you have roughly £10 to £50 that you can invest through the club each month.
- If you’ve been putting off learning about investing and sense that having a responsibility to the group would provide some much-needed discipline, than a club could help immeasurably.
- If you think it would be fun to have a group of people with whom to share company research and discuss investing topics.
- If friends have gently suggested that it would be good for you to get out of the house once in a while!
For more information about investment clubs, see this Fool guide.
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