Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Anyone started an investment club?
Old 11-18-2014, 09:58 AM   #1
Dryer sheet wannabe
 
Join Date: Nov 2014
Location: Nashville
Posts: 13
Anyone started an investment club?

Curious how many people here have ever started an investment club with friends? I have five or six close friends who have shown interest in forming an investment club, in which we will all start with an initial amount of $100.00 (each) to invest in some stocks we decide on and we would each add a minimum of $20.00 a month to the pool of funds to invest. This would all be just for the learning experience as only one or two of us have actually ever invested in stocks yet. We are all in our early 20's and this seemed like it could be a great way to share ideas on investing and hopefully it would give everyone the knowledge to start their own stock portfolio. I have created an excel spreadsheet (I should say in the process of creating) that would update with our chosen stocks' real-time prices and I have pretty much been able to optimize the entire spreadsheet to calculate the standard deviations, returns, alphas, sharpe ratios, covariances of the stocks, correlations, betas, etc of the portfolio and stocks. I would be giving everyone in the investment club a copy of the spreadsheet and showing them how it works so that we can all keep up with the investments we make on our own, and we would be meeting maybe once a month to add additional investment and check everything. Anyone else ever done something similar with friends? We will of course have to establish a set of rules or guidelines concerning withdrawal from the club and things of that nature. Anything I need to be sure to think about beforehand?
__________________

__________________
kagarnett is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-18-2014, 10:02 AM   #2
Thinks s/he gets paid by the post
steelyman's Avatar
 
Join Date: Feb 2011
Location: Triangle
Posts: 3,218
That sounds like The Beardstown Ladies.
__________________

__________________

steelyman is offline   Reply With Quote
Old 11-18-2014, 10:09 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Feb 2008
Location: Indialantic FL
Posts: 1,199
check out BetterInvesting - Non-profit Investment Education . I didn't start a club, but I am in one. The club would be a partnership and you would have to complete a tax return etc. Members would receive a K-1 from the club/partnership. Lots of good info on their site.
__________________
JimnJana
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
jimnjana is offline   Reply With Quote
Old 11-18-2014, 10:46 AM   #4
Dryer sheet wannabe
 
Join Date: Nov 2014
Location: Nashville
Posts: 13
Quote:
Originally Posted by jimnjana View Post
check out BetterInvesting - Non-profit Investment Education . I didn't start a club, but I am in one. The club would be a partnership and you would have to complete a tax return etc. Members would receive a K-1 from the club/partnership. Lots of good info on their site.
Thanks I'll check it out. That's what I needed to know.
__________________
kagarnett is offline   Reply With Quote
Old 11-18-2014, 10:50 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,977
Obviously an investment club could be successful. Years ago a couple of us tried to start one at work using the NAIC materials http://www.betterinvesting.org/Public/Clubs/default.htm, and about a dozen people signed up. However, when they found out they'd have to put up a little money and learn to research stocks, they quickly lost interest. Most of them thought we'd tell them how to double their money every year with no downside risk and no effort on their part. I hope your experience is better than ours was...

Many here might recommend a simpler passive/index investing approach using low expense ratio mutual funds vs active stock picking like most Investment Clubs. I used to be a stock picker/trader, being successful at it does require a lot of work, so you'd have to enjoy the process (I did).
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 11-21-2014, 03:03 PM   #6
Full time employment: Posting here.
 
Join Date: Aug 2013
Location: North
Posts: 714
I am going to start one. I have a lot of people asking me questions these days so I figured I would start a club. In less than a day I have 7 people interested and potentially more.

The tough part is going to be making the decisions and keeping up with the work to maintian the club.
__________________
AA (Stock/Bond/Cash ): 99/0/1% MIX (Small/Mid/Large): 50/25/25% BLEND(US/Foreign): 100/0%, (Value/Growth/Blend): X/X/X% REIT (Real Estate Equity): 50% of Assets

FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
kgtest is offline   Reply With Quote
Old 11-21-2014, 06:55 PM   #7
Thinks s/he gets paid by the post
Free To Canoe's Avatar
 
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,738
I am in a club. $20/mo. Our motto is buy high / sell low. Research is frowned upon.


Got to do it legal though. K-1 is a pain at tax time. Now worth $80k for 7 of us (got lucky with Apple).


We have fun getting together.
__________________
Free to canoe
Free To Canoe is offline   Reply With Quote
Old 11-21-2014, 07:00 PM   #8
Recycles dryer sheets
 
Join Date: Jul 2012
Posts: 95
I have belonged to an investment club for more than ten years. It has been a great learning experience and I have enjoyed the friendships I have made. The club existed for a number of years before I joined and had made money. One thing I initially liked was that there were rules in place on how the club would operate and stock reports were required to make decisions. A partnership agreement is especially important when disagreements and issues come up or members leave. Members need to have a clear picture of their responsibilities in a club and the time committment involved. We follow specific stocks in our portfolio and present reports twice a year as well as bring new stocks reports to the club. There is an agenda for each meeting and members serve as officers on a rotating basis. It is run like a small business using the NAIC principles. Visit the Better Investing website for more information. Good luck!
__________________
healthyandfun is offline   Reply With Quote
Old 11-21-2014, 08:22 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,624
My spouse was in two different NAIC-sanctioned investment clubs, so I read a lot of Better Investing magazine years ago. They are the best way I think to do an investing club, but it is clear they have an agenda. Some of the statistics in the articles and web site are misleading.

For instance, in those days they never compared a portfolio to a benchmark, but they would go to great lengths to show how a club's portfolio made 20%! Whoopeee! That is, until you saw that a simple index fund made 35% over the same time frame (data not shown in the magazine).

Also, the NAIC method is more about growth stock investing (at least in those days) and not value stock investing.

Anyways, my spouse's clubs were glued together by social reasons and they had fun regardless of not really making more money than investing in CDs. So a lot of work for not much gain.
__________________
LOL! is offline   Reply With Quote
Old 12-04-2014, 12:50 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
Do the forum rules forbid one occurring here, on the site? Seems like this is a great place to pool knowledge and money for mutual gain.
__________________
dallas27 is offline   Reply With Quote
Old 12-04-2014, 06:50 PM   #11
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 1,316
Sounds like a lot of work , kind of like a JOB

IIRC the Beardstown Ladies were exposed as puffing up their stated returns.

http://www.moneycone.com/the-beardstown-ladies/
__________________
“The finance industry is 5% rational people and 95% shamans and faith healers.” - Charlie Munger
Lakewood90712 is offline   Reply With Quote
Old 12-05-2014, 11:57 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Feb 2008
Location: Indialantic FL
Posts: 1,199
Quote:
Originally Posted by LOL! View Post
My spouse was in two different NAIC-sanctioned investment clubs, so I read a lot of Better Investing magazine years ago. They are the best way I think to do an investing club, but it is clear they have an agenda. Some of the statistics in the articles and web site are misleading.

For instance, in those days they never compared a portfolio to a benchmark, but they would go to great lengths to show how a club's portfolio made 20%! Whoopeee! That is, until you saw that a simple index fund made 35% over the same time frame (data not shown in the magazine).

Also, the NAIC method is more about growth stock investing (at least in those days) and not value stock investing.

Anyways, my spouse's clubs were glued together by social reasons and they had fun regardless of not really making more money than investing in CDs. So a lot of work for not much gain.
Basically NAIC still is about growth stock investing. Each month they do highlight an undervalued stock in the better investing magazine. There are a couple of BIX tickers that track the 100 most widely held stocks in NAIC investment clubs. You can bet clubs compare their relative performance to benchmarks. More importantly each month we review our holdings to and compare to our goal of doubling the value in 5 years. Each club is unique, some clubs are more value oriented than others. One of the reasons it is hard to compare a club performance to benchmark is that whenever someone leaves a club/partnership the club can transfer their "big winners" to the exiting member eliminating capital gains and taxes for the rest of the members.
__________________
JimnJana
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
jimnjana is offline   Reply With Quote
Old 12-06-2014, 08:48 AM   #13
Recycles dryer sheets
Greencheese's Avatar
 
Join Date: Oct 2013
Posts: 261
Tried it with some friends in the business department back in college. Was fun but in the end we performed below market for way too many hours of meeting.
__________________

__________________
Greencheese is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Anyone else want to join the "Lost over a million" club? novaman FIRE and Money 97 02-02-2016 07:58 PM
Oxford Club: Scam or Something Else education Other topics 13 05-25-2011 07:54 AM
Another one joins the club... sort of. Nords Life after FIRE 0 05-07-2006 02:04 PM
Anyone started a marriage while FI free4now FIRE and Money 29 01-26-2006 04:58 PM

 

 
All times are GMT -6. The time now is 07:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.