Monday, September 06, 1999

Tips for a successful investment club




        The National Association of Investors Corp. offers these steps for forming and running a successful investment club:

        • Read the NAIC Official Guide. The book describes the group's stock study program and gives instructions on running an investment club.

        • Decide whether to proceed. Set a date for the next meeting when first deposits will be collected.

        • Set a regular meeting date. Establish a regular schedule to boost and maintain attendance and dedication.

        • Decide the amount of monthly deposit. Most clubs start with deposits of $20 or $25 monthly.

        • Decide on the club name.

        • Adopt an agreement. Most clubs form as a partnership with a formal partnership agreement, a sample of which is offered in the guide.

        • Adopt operating details. Outline the club's bylaws and operating procedures. Include frequencies of meetings and contributions.

        • Elect officers.

        • Discuss and enforce individual responsibility. The success of each meeting, and ultimately the club, depends on each member's willingness to participate and contribute his or her fair share of time and energy.

        • Register the investment club name. Officials in Ohio, Kentucky and Indiana all say that clubs don't need to be registered as long as they are general partnerships and maintain equal participation among members, but check for specific requirements.

        • Obtain a tax identification number from the IRS. This can be done over the telephone if everything is in order.

        • Select a broker. The club can choose a full-service, discount or online broker depending on members' experience and willingness to pay commissions.

        • Join the NAIC. The group offers educational materials and accounting software.

        • Start a study program. Members should report on corporations that your club is considering buying; that will become a staple of the club's activities.

       



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Investment clubs pool resources
- Tips for a successful investment club
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