Puzzled about investments?

[BSClay]

An investment club can be a good place to learn the intricacies of stocks, bonds, and mutual funds: Members contribute a set amount of money each month for the club to invest.

Profits and dividends are reinvested until the group reaches a specific financial goal.

If you don’t know of one to join, you can start your own. Here are basic guidelines:

• Structure. Most clubs form as partnerships rather than corporations. Partnerships steer clear of paperwork, are easier to maintain, and often minimize taxes. Consult an attorney to make sure everything’s on the level.

• Meetings. Set a specific time and place for regular meetings—weekly, monthly, quarterly, etc. Because the club is a learning environment, always have an agenda, portfolio review, stock analyses, and recommendations. Vote for stock choices.

• Rules. Document the club’s procedures and policies. What will you invest in? What’s the maximum contribution any member can make? How do you join or leave the club?

• Responsibilities. You’ll have to elect officers and assign responsibilities for each position. Not everyone can be an officer, but you’re looking for full member participation, so it’s important that every member be assigned some kind of responsibility.

• Tax-ID number. It’s important to name your club and get a federal ID number from the U.S. Treasury. Open a bank checking account under the club’s name.

• Brokers. Depending on your investment objectives, you’ll need to decide whether you want a broker. Choose one that best suits your needs, be they full service or discount.

• Study. Again, one of the primary functions of an investment club is to help everyone learn about the principles of good investing. For instance, set up a program in which each member has to investigate and analyze a company stock. Another way to increase learning value is to host speakers on various investment subjects or go on field trips.

[dimetime]

I have heard about these on Tv but have never given any thought to joining one or starting one of my own.

Though for some it would be a very good idea on getting started. If I mention this to a few friends who have been discussing getting into investments, they may want to start up an investment club. If they do I may have to join but I guess I will find out how things turn out when I mention it to them.

Thanks for the idea and the information on getting started and what is needed. They will find all of this useful I am sure.