Investing as a Group

On November 30, 2012

Investing on your own may prove difficult, especially if you don?t have the funds to make your investment dreams come to fruition. However, investing as a group, whether buying shares, investing in property or learning how to trade forex, gives you greater buying power and more potential to achieve successful returns.

Investment Clubs

(i) The Perks

An investment club is most likely the best option for new investors looking to invest their worth alongside others. Investment clubs are ideal for some investors, particularly because they have the ability to:

• Allow a greater buying power.
• Increase education for members and give them a chance to learn about the market.
• Give new members high-end, real-world experience in the marketplace.
• Bring in higher returns.
• Lower fees and expenses by splitting costs between all members.
• Give members the chance to share thoughts and ideas about investing.

(ii) The Downside?

However, one of the main drawbacks to joining an investment club is that many of these clubs can be operated by scam artists. These people set up the investment club with the sole purpose of enticing investors and then stealing all their money.

When searching for and joining an investing club, make sure that you do so by reputable means. Find out as much as you can about the club before you join and be wary of direct offers to join any clubs, even if the offer has been made by someone you trust.

A trustworthy club should have strong goals and investment strategies, solid rules and regulations, a set structure and should present the right paperwork and certifications.

Shared Goals and Values

It?s important in investing as a group that you all share common goals, ideals and values. If not, this can lead to much conflict within the group, and subsequently, certain members can try to take control. Regulations and rules should also be in place (particularly in regards to when to sell and buy commodities or shares), and any monetary values (whether fees or profits) should be equally shared amongst all the members.

Evaluate your long-term goals, strategies and approaches to investing and consider how your group can work together to leverage your investment success.

Plan Long-Term Investments

According to some sources, the trend of investment groups and clubs often follows the potential for high returns in a fluctuating market. When times are good, groups flourish; however, 12 months later, when prices have fallen, the groups fail and disband.

The key to investing successfully as a group is to select a group (or start a group and select members) who are serious investors committed to long-term goals.

Investors who are looking to make a profit within the next 1-2 years are probably not earnest about their investing. Instead, all members should be passionate about investing and keen to share knowledge about the marketplace, with a realistic vision of investing over a numberofyears.

Source: http://www.theginlady.com/index.php/investing-group/

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