Investment club

An investment club is a group of individuals who meet for the purpose of pooling money and investing; members typically meet on a periodic basis to make investment decisions as a group through a voting process and recording of minutes, or gather information and perform investment transactions outside the group. In the USA the upper limit for the value of an investment club's worth is $25m. There is no lower limit. Investment clubs provide members a means to learn about markets, while meeting and working with people who have similar interests.

Although people have been investing in groups for thousands of years, the world's first investment club was allegedly established in Texas in 1898 back in the days of the Wild West when few investments could be considered safe. Investment clubs were seen as an ideal way of spreading the risk – away from just cattle.

While the first investment club on record dates back to the 1800s in Western America, Various online communities devoted to this type of investing have recently emerged and have contributed to the personal investing boom in the United States. One of the reasons that people come together in investment clubs is to learn how to invest. In Britain investment clubs took off in the 1950s, but the rate of formation fell at the time of the 2008 financial crisis.

Industry observers recommend prospective members adhere to these guidelines:

This form of investment club usually meets to develop interest in investing and the intricacies of investing for minors, usually high school students. They typically are led by an adult who has vast experience in professional investing.

These clubs are groups of people that pool their money to purchase stocks, stock options, mutual funds or bonds. Many clubs are educational in nature with objectives in line with learning how to make smart long-term investments. The National Association of Investors Corporation is a non-profit organization of many investment clubs with this purpose. These clubs may decide to buy or sell investments typically based on a majority votes.

Club objectives do vary and in the U.S. the Securities and Exchange Commission may require that a club be registered depending on the intent of investment. The SEC distinguishes between clubs on the basis of several laws including the Securities Act of 1933 and the Investment Company Act of 1940, which are concerned with whether the club issues membership interests that are effectively securities.

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