How to Start an Investment Club

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Start an investment club by identifying individuals to invest, opening an account in the name of the group, determining who will be able to buy and sell stocks and making a decision on what to buy or sell. Be diligent about taking notes or recording meetings at an investment club to avoid political problems with tips 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

Have you decided that you want to put your money in with one or more investors and form an investment group? Hi, this is Roger Groh of Groh Asset Management, and today, we're here to talk about investment groups and how you start one. There are several steps in the process. Number one, you have to identify whoever the other people are or institutions are that you want to work with. Second, you have to open up an account somewhere -- a bank or perhaps a brokerage firm -- in the name of that group. Third, you have to identify yourselves and the people within the group that are authorized to buy and sell stock or bonds or take money in or out. And then last, but not least, you have to figure out what you're going to buy, and come to a group decision on that investment. Now, not all investment groups are with small investors. Some groups are with very large investors, and it may make sense to join a group like that, especially if they are very knowledgeable in one field. The reason is that experience matters in most cases, and the more you know, the better you'll do. How do you handle the money? Well, you have to open an account somewhere to hold the combined monies of the group. The people then send in their cash to whatever bank or brokerage firm you've decided that's going to hold the money. Last, we all know that our memories dim, quote unquote, over long periods of time, so take good notes. Maybe even videotape meetings. That way, sitting at the table today making an investment decision, you have a very in-depth record of why you did it. If there's any question at some point in the future as to why you did it, you can always then go back and access that decision. It doesn't mean that the decision was right or wrong or you have made money or lost money. It just means that there will not be any discussion about why you did what you did. It will save you a lot of political problems in the years ahead. So I hope that helps. I'm Roger Groh at Groh Asset.


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