I am thinking of starting up an investment group. Am I right in saying that these groups mostly concentrate on investing in stocks & shares? Does a person have to be 'rich' in order to become a member? Ideally, how many membera should there be in the group? Are there any considerations that I need to take in order to start up a group i.e,. the minimum amount each member is required to invest? The proportion in which profits will be shared? etc.
2007-01-22 00:00:14 · 3 answers · asked by Manjinder C 1 in Business & Finance ➔ Investing
Investment (or Share) Clubs, as these things are often known, are a good way for small investors to get involved in the stock market.
Most "rich" investors (whatever that means) probably invest on their own quite happily - this is really for people whose individual investment amounts (a few hundred pounds in a lump sum, maybe, or a few tens of pounds per month) would be eaten up by commissions if they went solo.
However, yes, you do need a written constitution which covers every conceivable occurence - investors leaving (whether they retain their investment or withdraw it), new members joining, who decides where to invest, how much investment each member must make and when - all of that sort of thing. You have to be very careful because money and friendship don't always mix happily.
You would be best advised to set your club up within a regulated framework. ProShare is a not-for-profit organisation set up by the Treasury, Stock Exchange and some companies to help people form investment clubs - they have 12,000 clubs registered with them, and would seem to be the best place to start, and their FAQ (the last link below) answers a lot of your other questions.
2007-01-22 00:12:44 · answer #1 · answered by gvih2g2 5 · 0⤊ 0⤋
I, personally, would never turn over any part of my investments to committee decisions. If, on the one hand, you don't personally know enough about stocks to trade them well, learn. Depending on the judgment of others is bad business. If its the amount of money that is an issue, you can buy a single share of a $5.00 stock on line for a $9.95 commission. Or 100 shares of a $50 dollar stock for the same. The only reason would be that the opening amount for an account is typically $2500 cash. Good luck to you and, personally, I hope you can keep complete control of your investments yourself.
2007-01-28 18:57:31 · answer #2 · answered by ZORCH 6 · 0⤊ 0⤋
Do not have to be rich but have to be willing to have other people's vote have an impact on your investments. That alone should stop you from doing it. Too easy to start out without that.
2007-01-22 01:10:06 · answer #3 · answered by vegas_iwish 5 · 0⤊ 0⤋