The rapidly expanding network of Investment Clubs are usually made up of groups of friends who meet on a regular basis and invest a set amount in the stock market regardless of market conditions. It is an opportunity for people to learn how the stock market works and actively research various companies and sectors within the market. Participants can also make significant gains.
An Investment Club is a simple idea. There are already 5000 in Britain today - most of which have been formed in the last few years. You don't need a significant amount of money to be an investor, just to have an interest in shares.
Before forming an Investment Club it is important to set out ground rules. The Club should have no more than 20 members, otherwise you will have to register as a limited company. At the initial meeting, a constitution should be adopted. This governs, amongst other things, how new members are admitted and how existing ones are to be paid off when they want to leave.
Once you have agreed the constitution, elected a Chair, Treasurer and Secretary you are ready to discuss an investment strategy. It is sensible to invest with a view to holding the shares for at least 5 years. If there's one member who is desperate to make a quick gain on higher risk companies, you may be better off without them.
It is supposed to be fun as well as lucrative - in many cases groups meet up in pubs and use it as a focus for a regular night out. To ease the administration, shares can be held in a nominee account. WJM offer a nominee service and are able to provide investment advice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.