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Finding Members For An Investment Club

When starting an investment club, one thing that is necessary is members. Talking to a few friends and having them talk to a few of their friends can often be a good place to start, as many people will be willing to try investing if they are not doing it alone. Word of mouth is the best and sometimes the fastest way for any news to spread. In the beginning, before the investment club is formed, you can send out recruitment letters, advertise, put up notices on bulletin boards, or send out a news release if you think that will work the best. After the club is formed, it is illegal to advertise in these manners, although you can add new members through referrals, or by making an offer of public securities, which would allow a potential new member to buy in. There are also investment websites on the internet where you can post your interest in starting or joining an investment club, and perhaps find compatible people.

With all new members, either at the beginning or as replacement members, be sure that everyone has compatible investment goals. Some people may want to invest a lot, so as to be able to earn higher returns. Others may only be able to afford to invest a small amount at a time. You also have to look at how comfortable each individual investor is with risk - some people are very risk averse, and will only want to invest in very stable investments, while others may be more speculative. There are quizzes on the internet that people can fill out to state their goals and their comfort level, and this may give members a more objective way to compare everyone's risk-taking levels.

All members should be able to make the monthly contribution, as well as commit to researching certain companies on their own so as to give the group a report on that company and a summary of why or why not the club should invest in that company.

A concern when starting an investment club with friends is that it might not be a good idea to mix money with friendships. The same goes for relatives. You should be confident that your relationship with your friend or relative can weather ups and downs, and even so, money can sometimes make this more difficult. At the same time, an investment club can also be a fun social activity, and why not spend that social time with people who are already your friends?

Once you have found what you and the rest of the club feel is a comfortable number of members, you can start goal setting and planning to set up the rest of the club. You should have enough members to be able to have enough money to invest, while not having so many members that no one knows each other. Too large of a group can start to form divisions and it becomes more difficult for everyone to feel involved and included.

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