Starting An Online Investment Club
So, you’re sold on the idea of forming or joining an investment club – except for one little thing. You’re not crazy about the thought of reconfiguring your schedule to squeeze in yet another commitment. You’ve got a job, a spouse, and kids to tote back and forth to soccer practice. And that’s just for starters.
You might be surprised to learn that it’s possible to belong to an investment club without leaving your house and perhaps, never meeting the other members face to face. With the Internet, the impossible became possible, even commonplace. That’s right – investment clubs formed online and began to meet in cyberspace.
In most ways, online clubs are no different from living room-based clubs. Online clubs have officers, a partnership agreement, bylaws, bank and brokerage accounts, and a successful portfolio of stocks. So, online clubs enjoy all of the advantages of traditional clubs -- the ability for individuals to each contribute small amounts and still build a sizeable, balanced portfolio, while learning about investing as part of a group.
But instead of meeting at a set time each month, online clubs meet 24 hours a day in cyberspace. Your club is always open for business. Members post messages at any time of the day or night on myiclub.com – and that can be particularly convenient for clubs that have members that span the country or even the globe. In fact, online clubs have opened up a whole new possibility for friends or family members who want to form an investment club, but who live hundreds, or even thousands, of miles apart.
On myICLUB.com, message boards are set up to send the postings as emails to the entire club, which is a very popular way to communicate in between the monthly meetings. The ongoing discussions among club members are really no different than what you'd expect from a "face-to-face" club meeting. Members talk about stocks under consideration, the status of the portfolio, and new ideas for stocks to analyze. Members also have been known to argue about whether or not a particular stock is right for the club's portfolio, and usually (but not always) reach a consensus.
The meetings themselves are almost always done in person, with perhaps some members calling in, or maybe even video-conferencing. That's the advantage of myiclub.com as opposed to a desktop-based accounting program -- since it's all online, members can print reports, view valuation statements, post their analyses, etc, even if they live far away.
In the typical online club, a ballot is posted once a month, and members vote by sending their ballots to the club's secretary. Members mail their monthly contribution checks to the treasurer each month, and he or she uses the club’s online broker to buy and sell shares in our portfolio.
But in the end, the most important factors in evaluating the success of an online club is the education it provides, and a profitable portfolio. For many investors, it's impossible to commit to becoming a member of an offline investment club because of time constraints or geographic hurdles. An online club can be a great way to share information and learn about investing -- and to get started on the path to long-term financial freedom, as well! For more information about how to find a club – online or otherwise – to join, see our article on Finding A Club.