Is A Stock Market Investment Club Right for You?
Should you go it alone, or be part of a group? The stock market
can be an intimidating and confusing environment for a beginning
investor, and many people find stock market investment club to
be an ideal place to start. But finding a club that is accepting
members can be difficult. You may want to consider starting your
own club. However, let`s consider whether a club is right for
you. There are various personal and group benefits to being part
of stock market investment club.
The first benefit is the ability to take advantage of combined
stock market investment knowledge. When you work with a group of
people who have a similar interest in the stock market you`ll
have a large amount of combined knowledge working in your
favour. Even complete newcomers to the stock market will have
valuable opinions and pieces of information that can come in
quite handy. With a democratic approach to decision making, a
groups stock market investment choices will always be able to
take advantage of this knowledge base. However, if you`re unable
to function in a group atmosphere where the majority will rules
whether or not your choice is in the majority, stock market
investment club may not be for you.
Recent studies of stock market investment clubs have also shown
that when a group of people make investment decisions after a
series of discussions and debates, the potential for profit is
greater than when individuals make their own decisions about
where and how to invest their money.
Along with these combined knowledge resources comes reduced
risk. Even though the money that your club has to invest can be
quite large, your own personal contribution can be small,
allowing you to learn how the stock market works with minimal
risk. You can still make some great stock market investments but
your loss factor will be more manageable. Keep in mind that when
your club makes a profit, no matter how small, the amount will
be distributed throughout the membership.
Investment clubs have the ability to invest in the stock market
even when the market is dropping, or is slow. Because the money
in spread out among a group of members the chances of a large
personal loss is unlikely, as a part of a group of people you
can also diversify your stock market investments, and not be
limited to just one or two market choices. As well, since most
members are part of stock market investment club as a learning
opportunity, there will be more room for reinvesting the gains
and dividends that are realized from successful investments.
When you invest on your own, you often won`t be as willing to
part with those profits.
While these are all positive aspects of belonging to stock
market investment club, there are also some individual benefits
you may want to consider. These can include:
++ Building your confidence. A stock market investment club is a
safe place to get started. Being a part of a club ensures you
will receive support from like-minded people, and a chance to
learn the market with greatly reduced risk.
++ It keeps your stock market investments low. If you only have
a small amount of money to invest each month, such as $25 to $60
dollars, then stock market investment club is perfect for you.
You can invest small amounts of money, such as these, into the
larger combined total of the entire club.
++ It`s fun and educational. A stock market investment club
combines the all the social aspects of a good club with a chance
to learn more about investing. The regular meetings will give
you the structure to keep learning more, and the social aspect
will keep it from being a classroom-like experience.
Investment clubs have been a fun and effective way for many
investors to get started in the Stock Market. They have existed
for many years, and their numbers keep growing. There is likely
to a club close to you that will fit your stock market
investment style. If not, consider starting one.