How Do I Choose the Best Stock Investment Club?

An investor interested in joining a stock investment club may be initially overwhelmed with the number of choices. These organized groups are formed all over the world and each might contribute something different. Often, stock investment clubs are groups of people who know one other either through professional relationships or as family and friends. It would be helpful to join a group with a manageable size and also one that is at a stage that will help you to grow as an investor.

You may want to select a stock investment club that is local so that you can meet with other group members in person. Technology has made it possible, however, to join and contribute to long-distance clubs and communicate over conference calls and the Internet. Attempt to join a club that meets at least monthly so that you don't let too much time pass by without seizing investment opportunities.

Some clubs are linked to a formal investment organization, such as the National Association of Investors Corporation (NAIC) in the U.S. Joining a stock investment club such as this might help with accountability for all club members and set the course for an investment strategy. An industry group often gives guidelines for investing, parameters that may include remaining in the markets over the long term even when stock prices are declining. Other protocols that could be learned from a professional agency could surround setting an investment time-line and redirecting any profits or dividend distributions back into the stock market. By linking to a larger organization, you can benefit from professional advice even if most members of the stock investment club are beginners.

In some cases, you might be able to maximize an investment's potential by combining the assets of multiple individuals and directing the money into selected stocks. You may, however, prefer to to join a group in which members invest individually. It's a matter of preference and resources. Often, investment club members are expected to make cash contributions towards investments regularly. The amount can be minuscule and should be agreed upon by members in the group.

Before selecting a stock investment club, you should consider your experience investing in the financial markets. If you are new to investing, attempt to join a group where some education or preparation for investing is provided. You can also make this contribution to a group by suggesting and arranging informative sessions with expert presentations for members who seek to increase stock market knowledge.