(1) Can I get my money out at any time? Yes, at any time you are in the position as to
remove 100% of your equity in the club. However, be certain to only invest
money that you won’t need for the near term. The club is a conservative
portfolio with its sights in the long-term benefits of investing as a whole.
The Club will retain 1% of the due amount at the time a member leaves if that
member has been with the Club for less than one year. This is to discourage
people who are not serious about joining and also to make good use of that 1%
for the benefit of the group. As stated in the bylaws, the club reserves the
use of the 1% for educational or accounting purposes of the club.
(2) What do I need to do to become a Member? You only need to express interest, have
available money to invest, time to dedicate to the club and be aware of the
disclosures and the bylaws. Contact the Club or an Officer/Founder.
(3) What are the investment limits? The Club will only invest in indexes, stocks,
and money markets.
(4) What will the Club not invest in? The club will not engage in short selling,
futures, international exchanges, emerging markets, bonds, or market timing.
(5) Why not invest in Mutual Funds? The fund is designed to be different than a
mutual fund. The fund is geared toward low portfolio turnover and believes that
the Mutual Fund Industry charges too much and adds little if no value at all
for the fees they charge (remember, these are recurring fees, its an embedded fee year after year, that simply takes away from your overall return).
(6) Why not follow an investment letter or superior
trading strategy to beat the broad indexes? Show me someone that has made it work while focusing on
preservation of capital. If the professionals with all their advisors, analyst,
and inside information cannot beat the indexes, then who can?
(7) Yes, but there is a Mutual Fund Manager who has been
able to beat the index for the last 7 years. What are the chances that this individual will be able to repeat
this performance, and why should we take the chance that this style or manager
is going to be around to beat the “new” markets. Also, consider the after tax,
comparisons. Nearly 95-99% of funds will under perform when taxes are
considered.
(8) Why not invest in an index then? By virtue of this Club, we will in effect be
composing an index of stocks that we “hope” that coupled with low turnover,
diversification, nearly no fees long term, and no emotional trading involved,
that we won’t have to look at the index to beat it, instead we are an index. It
is the founder’s findings than one cannot beat an index by trading the index;
instead one should look elsewhere to the components to obtain different results.
Another benefit of making our own decisions is that we can learn much from them
along the way, no one will benefit if we just intend to equal the averages by
buying the averages.
