Why Some People Almost Always Make Money By Following These
Stock Investment Club Guidelines
I can tell you right now that if you settle down with your frame
of mind now, you will be entering into a relationship that has
nothing but pure pain.
Whenever a group of people get together for a common purpose, a
structure must be put in place, or not much happens. A stock
investment club is no different. For a stock investment club to
be successful there are several features that need to be in
place for the club to run smoothly.
There are two broad types of people in the market, investors,
and traders. Investors use the market to build a stock
investment portfolio that will realize them a profit in the long
term. A trader uses the stock market to make money quickly over
a short period of time. Members of a stock investment group
should consider themselves to be investors, since they will be
in the investment market for the long haul.
Because of the long term nature of the stock investments, a club
will need to have clear investment goals. All members of the
club should have the same philosophy about investing, and be
pursuing the same goals. If these goals aren't made clear, the
membership could easily become divided about stock investment
decisions, and the effectiveness of the club could suffer.
There should be a clear understanding established of what
percentage of the profits realized from the investments are
going to be distributed and what percent is going to be
reinvested immediately back into the stock market. There should
be balance between growth and stability.
But before any stock is purchased or sold, it should be required
that all members of the investment club be part of the study of
these stocks, and be part of the final decision. The club can
use technical or fundament analysis of the market to help make
these decisions, whichever fits their investment style best.
Because of this fact, it's important that all members of the
group attend all the meetings. When there are decisions that
need to be made about ongoing investments and future stock
investments each member needs to be part of the decision
process. If the group decision is held up because some members
don't attend regularly, the effectiveness of the stock
investment group is jeopardized. Club members should also
communicate on a regular basis. Part of the experience of
starting a stock investment club is getting together to enjoy
similar interests and goals.
It's a good idea for all members of the club to have Internet
access so that they can keep track of the market from their
homes, and to make it easier to communicate with other members
frequently. The importance of good communication between members
of the group can't be stressed enough.
And last, but certainly not least, there clear records must be
kept of all stock investments, profits, losses and any other
money issues, that follow accepted accounting guidelines. These
records should also be available for any member of the club to
read at any time.
If all of these guidelines are met, the members will be
confident in their club, and feel secure in their stock
investments. This will allow the club to grow, and likely
produce profits, as well as market experience, to its members.
Without the guidelines, a club will be chaotic and ineffective.
And a good way to lose your stock investment.