Getting Your Investment Club Started
Opening an investment club takes a bit of organization. Follow these steps to help you get started, and your club will be up and running in no time!
 Choose your members. Start by talking to a couple friends. If they are interested, ask each of them to find a few others. Try to achieve some variety in occupations, backgrounds or interests. If you plan on drawing a group from where you work, select only half of your members this way. But be selective. Members should like, trust and enjoy each other's company. They should agree on common investment goals. And they should all make a commitment to be actively involved.
Don't make your club too big or too small. It is a good idea to target 20 people with the aim of finding 15 permanent members. That's enough to spread the work around, while still small enough to have everyone participate.
Hold an introductory meetingHold an introductory meeting to discuss the philosophy, operation and goals of the proposed club. To get prepared, read through NAIC's (National Association of Investment Clubs) guide. In fact, it is a good idea to read the introduction of the book to the group. At the end of this discussion, ask for a show of hands of those who would like to organize a club. If a number of people are interested, you should set a date for the next meeting.
Decide on an operating structure. Discuss the adoption of the Club's Operation Agreement. Most Clubs form as a partnership. You will find a discussion of the points to be considered in the NAIC Official Guide. To save time, you may want to suggest that the Club adopt the Partnership Agreement shown in the Guide in Chapter 17, and reevaluate the decision in six months.
Formalize your operating procedure. Discuss the adoption of the Club Operating Procedures as outlined in the NAIC Official Guide (Chapter 17). To save time, you may want to suggest the group adopt the provisions as shown in the Guide with the idea that changes will be considered later.
Elect officers. Pick your club leaders as called for in the Club's Operating Procedures.
Discuss the time commitment required. During the first year, as the members are learning to analyze stocks they may find it necessary to devote three or four hours a month to the Club. After research techniques are learned, members shouldn't have to spend more than an hour a month preparing for the Club meeting. But it is important that everyone is willing to do their homework. The success of each monthly meeting depends upon the presentation of information by members.
Set a regular meeting date. A time and place should be selected by the Club for monthly meetings. Hold the meeting on the same night each month. Making it easier for members to plan should boost attendance to your Club.
Decide on the amount of your monthly deposit. Most Clubs start with members depositing anywhere from $20 or $50 monthly. While it is not necessary, it is a good practice for everyone to make the same deposit in the Club for about the first year. After that, some members may wish to vary their deposits and some members may wish to withdraw a part of their funds. The record-keeping procedure for deposits and withdrawals is outlined in the NAIC Official Guide. This procedure is highly recommended since it permits the receipt of varying deposits, the acceptance of new members without the need for making other than the current month's deposit, and the partial withdrawal of funds by members of longer standing.
Name your club. Be creative, and choose a Club name that fits your group.
Consider Joining NAIC. Club Membership in NAIC may be smart move for your Club. For more information on NAIC membership, benefits and prices, see the information on Investment Club Membership. Your Club treasurer should consider obtaining NAIC's Investment Club Accounting Kit. If your club has access to a computer, club accounting software programs are available for Windows and Macintosh.
Review NAIC's Official Guide. Appoint one person to conduct a review of the NAIC Official Guide a chapter at a time for the next several months. Read the chapters on Investment Philosophy and Security Analysis, but all of the sections should be covered.
Build an investment club website. Get the details here.
Open an investment club account. It's easy for your investment club to open and manage a club account with WFN at Siebert. Invest in stocks, bonds, options, and any other securities on or off-line. Simply fill out the Account and Investment Club Cash Account applications and get started investing today.
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