So let’s assume you’ve assembled your members of the investment club, you’ve gotten the name secured, done the paperwork for opening up a brokerage account with one of the many online discount brokerage firms.
You’ve picked a regular meeting time. Now comes the actual meeting. Everyone is gathered somewhere, either in a restaurant (provided you can find a quiet room in which to meet) or someone’s home. (You can rotate homes or stick with the same meeting place. Decide as a group, with the majority winning.) Let’s say everyone wants to meet in the same home every month.
So, here you are. Everyone grabs a cup of coffee and a brownie and moves into the living room, where chairs are set out for all the members.
The President calls the meeting to order (at the subsequent meetings, the minutes from the prior month’s meeting are read by the Secretary.) Most investment clubs choose to meet on a monthly basis, but of course you can set it up any way you want: bi-monthly, weekly, whatever your group decides upon. Reading the minutes is especially helpful because if you only meet once a month, as you might need to be reminded as to what happened in the last meeting.
The Treasurer collects the checks from each member, made out to the brokerage firm. In one of my clubs, we ask the members to write twelve undated checks for each month of the year. The Treasurer keeps the checks in a file and pulls one out from each member at each meeting. In this way, if someone can’t make it to the meeting on any particular month, the Treasurer can go ahead and make the deposit to the brokerage firm as needed, in a timely fashion.
In my investment clubs, as we purchase stocks of various companies, we assign a member to oversee each particular stock. This means she is responsible for reporting on the stock at the meetings: Letting us know if there’s any change in the financial situation; any news of importance in terms of the club knowing whether or not we want to keep or sell the stock.
We spend quite a bit of time going over the stocks in our portfolios. One of the requirements of the members is they commit to overseeing their stock. If this isn’t done, it’s difficult to know at a monthly meeting what should be done with the particular stock. So this is vital.
So, you see, there are two important requirements for the members so far: To make sure there is a check each month for the designated deposits, and to oversee a stock or two as required.
After the stocks are reported on, it’s time for someone to give a report or pitch on potential stocks to buy. (We usually wait to decide on what to sell until we see what is suggested that we buy. Sometimes you don’t want to sell a stock unless there’s something of great interest to buy.)
You can rotate among the members as to who does the pitches or you can have people pair up with a partner. I would recommend no more than three stocks to be pitched on any one evening or meeting. Otherwise it’s a bit like a mental overload! The person pitching should bring as much printed information as she can easily produce, handing out copies to the other members and doing a good job of “selling” the stocks she has done research on.
When the stocks have been pitched, the members can go back and vote on whether or not to sell something that is already in the portfolio. You would sell because the stock has been a loser, it’s not going anywhere, or the news has changed on it from good to bad. Or you might want to sell because you have profit that you don’t want to lose. Learning to not be greedy is always a great lesson for members to learn.
When you vote on the stocks, be sure to assign a member to oversee the stock. You can also vote to buy more than one stock if there’s enough cash available.
Let the members know when and where the next meeting is, assign someone to pitch the next month, and you’re good to go.
One of the great things about an investment club is that it can provide great information for the ladies in the group to use in their personal investing. I’ve picked quite a few winners for my own portfolio based on someone else in the investment club doing a great and informative pitch that impressed me.
Investment clubs are not only great social vehicles but also a place to learn a lot together about the stock market and how to research, invest and sell when necessary.