How to Start an Investment Group

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To start an investment group, gather a group of investors, fill out paperwork to start a group with a local bank or brokerage firms, have everyone contribute money, and decide how to invest the group money. Visit the bank or brokerage firm after meeting about potential investments to get the process started with advice from a financial consultant in this free video on investments.

Part of the Video Series: Investment Tips & Financial Planning
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Video Transcript

Do you have a group of friends or neighbors that feel that the combined knowledge of the group would result in better investment performance than going it alone? Hi I'm Roger Groh with Groh Asset and today we're here to talk about how do you form that investment group? Well really it just takes two people where you agree to partner with another person or hundreds of people, whatever the numbers might be. To physically do this, you then go to your local bank or brokerage firm and you fill out a form that they have which will enable you to open up an account for this investment group. There are various signatories involved in that, meaning the group has authorized one person or two or ten or whatever it might be to buy or sell stock, withdraw money or deposit money. Not everybody will have that right within your group. Once you've gone to your investment firm and you've established this account, then each person has to put some money in and whether you put it in a dollar each or 10,000,000 dollars each, it's the same idea, you have one group, everybody kicks in some cash and then you're ready to go. So at that point what do you do? Well you probably have to have some sort of meeting, it could be on the telephone, it could be in person, it could be online, it doesn't matter. And decide what you're going to buy or what you're going to sell short, whatever your investment discipline might be. Once you have made that decision, then you go back to the place, the bank or brokerage firm that holds your money and you instruct them as to what to do. But not all investment groups buy public stocks, meaning there's no reason why an investment group can't go buy a house. In that situation it the tightly and then the account is slightly different, meaning you wouldn't use a brokerage firm to do that, you would use a bank to hold the combined cash of the participants in the group and then once you decided to make the purchase, the authorized person on that account would go and get a check or borrow money perhaps in order to make the transaction go. I've been involved with many groups, not necessarily investment groups, but companies and foundations and frequently at some point in the future memories change a little bit and you may not think that what you're doing is what you said you were going to do. So the smartest thing you can do in an investment group is take good notes and that way you can simply go back to the original thought and be sure that you have progressed accordingly. It will save you lots of political problems going forward. I hope that helps, I'm Roger Groh with Groh Asset and thank you very much for spending time with me.


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