How to Run an Investment Club

Running an investment club is not for the faint of heart. Many factors should be carefully considered before accepting the role of Investment Club President. Aside from being the most knowledgeable investor in the group (hopefully), other skill sets such as time management and personality skills will prove advantageous during times of conflict. That said, lets go through the details of an investment club meeting that you will be running.

Instructions

1. Meet your investment club at your previously scheduled date and time. Be early, because everyone will want 5 minutes with you to discuss the prior meeting's old business.

2. Bring everyone into attention and exchange pleasantries. This is also an effective time to welcome new members into the program, but only for the basic "hello and glad you are here" spiel.

3. Cover any old business from the prior meeting. As the leader, do not let the group become bogged down with past disagreements or developments.

4. Allow the club treasurer to collect the club's agreed upon financial contribution and discuss any pressing financial situations involving the club. This is also an excellent time to alert the new members of their obligations to the clubs and advise them of the necessary tax implications.

5. Begin discussions for new business. New appointees to the research committee, new developments in the economy, or a shift in the group's objectives are all open for discussion here. Just be prepared to use your experience and people skills to keep the discussion moving efficiently. In larger groups, this can become a serious misappropriation of time.

6. Discuss the current investments in the club's portfolio, and if changes should be made. Review any relevant news, press releases or company events that will have a direct impact upon a stock's value.

7. Discuss the purchase of new securities for the club. Begin debating why each stock is a better choice than the others, and narrow this discussion down to one or two stocks for the group to purchase (this can be a mutual fund or ETF as well).

8. Direct the treasurer to make the necessary purchases once a group decision has been made. As president of the club, you can choose to halt the stock purchase if you feel it is a poor choice. However, this is dependent upon the chosen bylaws of the investment club.

9. Make preparations for the next scheduled meeting. Assign any tasks which need to be completed by the next meeting such as research reports, dividend payments to members or group presentations.

10. Get a club consensus for what dates and times are the most effective for the entire club. This is often the most difficult part, but attempt to schedule the meeting on weekends, or times in the mid to late evening so everyone has an opportunity to attend.

Tips & Warnings

• One of the best attributes an investment club president can have is effective leadership and personality skills. Do not elect a person with a squeamish personality or who has poor communication skills.

• Pair novice investors with experienced investors to speed up the education process. Many people who join an investment club are there simply to learn how stocks are chosen and how the basic principles of investing are enacted.

• Always put on your business face once the meeting starts. Many of these people will be your friends for life, but if you're the head of this group, don't be afraid to lead if you feel you are right.

• Never allow a new member to enter the club unless the treasurer is made aware. The treasurer's role is to keep all the finances in order, and thus, must have complete documentation of every financial transaction the club initiates.

• Don't be afraid to ask a club member to leave the group if his behavior is deemed inappropriate or has a negative effect on the group as a whole.