Chapter 16: Starting an Investment Club

 

I. What to look for:

A. The venture must be enjoyable socially as well as educational and money-making

B. All members should be committed to the same investment philosophy

C. All members should commit to active participation.

 

II. Where to look:

A. Who to invite into your club:

• Variety of people
• Co-workers, friends, co-volunteers
• No one more than 1 hour drive away
• People who will make a lifetime commitment to the club

B. Who not to include:

• Lawyers and accountants are not necessary
• No financial advisors (they become crutches)
• No more than 1/2 of the club should work together

 

III. How many members:

A. Usually about 15

B. Big enough to divide the work

C. Small enough so everyone can be directly involved

 

IV. Before the first meeting:

A. Suggest chapters 1 and 17 to interested parties

B. Invite an experienced NAIC member

 

V. At the first meeting:

A. Emphasize benefits of joining, which do not include get-rich-quick

B. Answer questions. Consider adopting NAIC guidelines to start off

C. Establish time and place for meetings, and initial deposits, which could be lost.

D. Decide on monthly investment amount. Use bookkeeping that allows for varied deposits and withdrawals.

E. Decide on a broker. Advice/no advice/price/etc. Visit a brokerage before deciding

 

VI. Select Club Officers:

A. Presiding partner - sets time and place for meetings, oversees committees and activities

B. Assistant Presiding partner - takes over when Presiding partner cannot, responsible for education

C. Recording Partner - takes notes at meetings and informs those who are absent

D. Financial Partner - maintain financial records, places orders with broker, keeps track of receipts and payments, calculates members' shares of the club, files tax return

 

VII Organize your study program:

A. Monthly Study program from NAIC = 12 articles for first 12 meetings

* Success depends on commitment from each member

B. Assign Stock Check Lists (chapt.7) and Stock Selection Guides (chapt. 8-10)