|
|
Setting Up an Investment Club
Investment clubs on the web
Investment club banners
Books on how to start an Investment Club
Our Investment Club Discussion Forum
Here are some hints and tips on setting up your own investment club.
WEALTH WARNING
Firstly a wealth warning! Before you start or join a club you need to be sure you can afford it.
Taking our club as an example, if a potential member is worried
about not being able to afford to lose £25 a month then the investment club
is not for them (and perhaps they shouldn't be in the
stockmarket at all). In out first year we lost money (through setting up expenses,
room hire and general inexperience) and we don't seem to be unique. But
Please also see out final wealth warning below!
FANTASY PORTFOLIO
We ran a fantasy portfolio of £10,000 for 6 months before we started. This generated
interest in forming a club and secondly gave us realistic expectation
on our returns (we soon forgot about doubling out money overnight!). This
may not get you in quick enough but it may be something you want to
do alongside your real portfolio when you get going.
PROSHARE
ProShare is the umbrella organisation for Investment Clubs in the UK.
You will need a "ProShare Investment Club Manual" to get you going which costs about £25.
Click on the ProShare link to find out more.
MEMBERS
You need 4-5 members to start with. You will need to appoint a chairperson
secretary and treasurer. We got people from work or by word of mouth.
We've also seen adds in the local library (why not put a slip of paper
in the library copy of Investors Cronicle?) and you can always use
the ProShare Dividend magazine.
ACCOUNTS
Accounts are the most complicated bit of the club. Get someone
who is relatively numerate (and preferably spreadsheet literate too)
to do this. Nominate a second person to check every month. Even now
it is rare that we get the accounts right first time. The ProShare
manual gives you all you need, but you do have to study it!
JOINING AND LEAVING
Accounts wise, it is easy to join or leave an existing club as all
funds are held in the equivalent of a unit trust. You can cash in
any or all of your investment at any time (and without leaving the club!).
BUYING YOUR FIRST SHARE
In our opinion you need to get a portfolio of 2-3 shares going quickly in
order to get some interest in the club. We bought 3 companies in the first
two months using two months fees plus the joining fee to do this.
This meant we dealt in amounts around £350 each. Although this
increases the dealing costs, it does increase the interest in the club.
It also meant we then had a quiet time until we had enough money to invest again.
STOCKBROKERS
Initially you need a low cost share dealing service, but once you get
going, the we recommend you use a stockbroker that holds all your
equities in a nominee account. This is because we found that chasing
round ex members who were trustees to get their signature on a share
certificate within the required time period to sell a share
get be very stressful. We use Barclays. There are several others you could also use.
FREE SOURCES OF INFORMATION
If you've not done this type of thing before then to get you going
the there are a few places to find free information. The library holds
numerous investment journals and back copies of information. EXTEL
is a favourite. HSBC produces a free monthly tip sheet that you
can pick up from any branch. Finally there is the web. See our links
page for this, but always remember, where there is a tip there is a tap!
FINES
For a bit of fun, fines can be introduced for any reason. We recommend you fine
anyone who says 'I told you so'.
FINAL WEALTH WARNING
Finally, if you get it right, you will not only have a good time
but you will be very surprised how much your contributions could soon be worth.
Investment Club Books
Here are a few books that you may find useful in starting an investment club. All links go through to WH Smith's internet Bookshop.
Starting and Running a Profitable Investment Club; The Official Guide from the NAIC
O'Hara, Thomas PaperBack £7.68 (Normal Price £9.85)
The Millionaires' Club; How to Start and Run Your Own Investment Club--And Make Your Money Grow!
Brown, Carolyn M. PaperBack £10.23 (Normal Price £13.11)
Investment Clubs; A Team Approach to the Stock Market
Shaw, Kathryn PaperBack £7.66 (Normal Price £9.82)
Investors Chronicle Beginners' Guide to Investment
Gray, Bernard Paperback £11.99 (Normal Price £14.99)
Beardstown Ladies Common-Sense Investment Guide; How We Beat the Stock Market-And How You Can To
Beardstown Ladies PaperBack £6.12 (Normal Price £7.85)
The Beardstown Ladies' Guide to Smart Spending for Big Savings; How to Save for a Rainy Day Without
Beardstown Ladies PaperBack £6.64 (Normal Price £8.51)
The Beardstown Ladies' Little Book of Investment Wisdom
Beardstown Ladies £7.66 (Normal Price £9.82)
The Beardstown Ladies' Pocket-Book Guide to Picking Stocks
Beardstown Ladies PaperBack £3.33 (Normal Price £4.27)
|
|
|
