1. Starting an Investment Club
Leader Guide
Learner Objectives:
As a result of participating in this program, learners will:
Know what an investment club is
Determine if they would like to join a club
Know how to start an investment club
Know if an investment club can assist in meeting their financial objectives
Participant materials:
Publication: FS 583 Starting an Investment Club
Activities
Risk tolerance questionnaire
Tracking stocks/mutual fund activity
, Roll Call Ideas
Names for investment clubs
Before the Program
Read through all materials.
Decide what you will cover. Highlight those areas.
Make or borrow presentation materials from the county office.
Order or pick up quantities of the handouts you will use.
Make copies of the activities you will use.
Decide on a roll call idea.
Notes on the Program
This is a basic introduction to starting an investment club. Participants will be at different levels of understanding. Try to pick out the facts that fit both your time frame and your participant knowledge level.

2. What is an Investment Club?
Educational
Investment
Social
“These clubs are filled with people who want to learn more about investing and are glad to do it by investing $50 to $75 a month.”
- Allyson Lewis, author of The Million Dollar Car and $250,000 Pizza
An investment club is the coming together of people who want to actively participate in both the research and decision- making process of investing money. According to the National Association of Investors Corporation (NAIC), approximately 100 new clubs register membership with the organization each month.
The best thing about joining an investment club is typically the camaraderie of its members. Sandra Beckwith enjoys being a member of an all-women’s investment club in Rochester, NY, and says the group has expanded her social circle. “We spend a lot of time laughing at our meetings,” observes Beckwith. “What could be better than making money while you’re having a good time?”

3. Investment Club Facts Average Club Portfolio = $40, 366
54% of investment clubs are women-only
Average individual monthly investment = $58
Average monthly club investment = $928
Average club is 4 years old
Median member age is 50
Source: National Association of Investors Corporation
The average National Association of Investors Corportation (NAIC) investment club portfolio value is $40,366.
54% of NAIC investment clubs are women only, 8% men only, and 38% co-ed.
The average club investment per member per month is $58.
NAIC investment clubs invest an average of $938 a month in common stocks.
The average investment club is 4 years old.
The median age of investment club members is 50.

4. How an Investment Club Works
Participant roles
Pooled money
Group decisions
“Since the first investment club was founded in 1940, the number of clubs has grown to more than 23,000. And with annual returns of up to 12.7%, they sure beat an afternoon under an umbrella.”
- Lorayne Fiorillo, author of Financial Fitness in 45 Days
When you join an investment club, which usually ranges from 12 to 16 members, each participant assumes a particular role. You may be the group leader, buyer, or part of a stock selection committee. Many clubs give every member the responsibility of researching a specific stock or an entire market sector and making a report at each meeting.
The work of investment clubs is similar to mutual funds--you pool your money with other members and consequently can purchase more shares than you could by yourself. Only you don’t hand over the day-to-day portfolio management to a professional money manager--you and your fellow members are the managers.
Club members are therefore responsible for:
Researching securities and presenting the data to the rest of the group.
Opening a brokerage account.
Executing trades, either through a broker or online via the electronic trading system.
Making ongoing buy and sell decisions.
Tracking and reporting overall portfolio performance.
Accurate management and reporting of taxes for each member.
Maintaining buy and sell confirmation paperwork and other administrative tasks.

5. Starting an Investment Club
Existing groups
Online communities
Friends
Family
“Successful groups have been started among church choirs, people living in the same apartment building, bowling leagues, softball teams, bridge clubs, or groups of co-workers.” - Lorayne Fiorillo, author of Financial Fitness in 45 Days If you’re interested in starting up investment club, consider the following guidelines: Research investment clubs to understand what is involved. Start by contacting the National Association of Investors Corporation (NAIC) online at for guidelines on how to start and run your own investment club. Host a recruiting party for friends and colleagues to acquaint them with your plans and goals. Choose anywhere from 10 to 40 members--most clubs average 16 members. Establish how your club will operate--most commonly as a partnership (the NAIC guidelines can help walk you through this step). Choose your club name, this can be a fun activity! Elect officers and assign responsibilities to individuals or committees to ensure that every member has an official role within the club. Establish a meeting schedule, place(s), and time--most clubs meet once or twice a month. Determine the educational program for your club. Determine how much time each member should spend on research or other advance preparations for meetings. Establish the initial investment amount and/or monthly contribution--usually from $25 to $50 per month per member. Select a brokerage firm that will handle your trades and decide whether or not you want a broker dedicated to lending advice to the club.

6. What to do to maintain membership…and morale!
Don't forget the social aspects of your investment club. Provide or allow for refreshments. Allow socialization time for members to get to know each other. Change your meeting location once in a while to someplace fun--or have a club field trip or family picnic.
Assign new members a mentor to help them adapt to the policies and procedures of your club. This will also allow them to become a contributing member of your group more quickly.
As your group becomes more sophisticated, explore new resources and add new topics to your educational program.
Try to follow your club's rules to avoid conflict. Remember it is far better to change rules that are not working than to break rules and create conflict.
If things get too heated, quickly table the topic. Assign members the task of bringing more information about the topic to the next meeting.

7. Why join?
PROS
CONS
You may use this slide to generate discussion about the pros and cons of joining a club. For example, pros may include: socialization, education, investment. Cons may include: time commitment, financial commitment and tax complications.

8. Ready to start or join a club?
Now you know the basics of an investment club. If you decide to join one or even start one, you will know what you are getting into!
Please have participants fill out evaluations and return to county extension office.