In your early
days as an investor, two heads can be better than
one for avoiding the classic mistakes. It can
pay to join an investment club. At the very least,
such clubs encourage investors to invest, and
take loneliness out of the process.
Members can usefully pool different levels of
know-how and life experience, but only if they
share the same broad view on how to invest. It
does not always happen and the club can fail.
For instance, technical analysts (Days 8, 9 and
10) have a very different strategy from value
investors. The two approaches can be combined
but it does not always, or easily, happen.
If you want to be part of an investment club but
cannot find a suitable one, consider setting up
your own. In the UK, this is easier than you might
think. Visit the website of Proshare Investment
Clubs at www.proshareclubs.co.uk for help.
You will run your club most easily as a partnership
with a legal maximum of 20 members. You will need
a treasurer, who issues monthly financial statements,
as well as a chairman and secretary. Members will
contribute a regular subscription - perhaps £30
a month - to the club’s investment fund,
and will be entitled to give notice and sell out,
removing their stake at its current value. You
could hold meetings monthly, ideally in a neutral
location such as a pub.
