Why You May Want to Start, or Join, an Investment Club

Investment clubs are a great way for people to sound out investment ideas, ask questions, and increase their knowledge of the stock market with the help of friends and family members. The popularity of investment clubs, which started in the 1950s, has waxed and waned over the decades, but during the pandemic there has been a resurgence of interest. Social media and virtual collaboration tools make it easier for people to organize and participate in clubs. A new generation of no-fee trading apps enables people to buy fractional shares of expensive stocks with no account minimums. There are even dedicated sites that can help people form their own clubs or join other existing clubs. Some sites can even help clubs calculate investment results, maintain accurate accounting records and generate required tax forms.  While participating in an investment club is fun and can help you become a more confident and knowledgeable investor, you should consider the money you invest to be “fun money” that you can afford to lose. The bulk of your investment assets should be invested in a diversified long-term portfolio that’s designed to align with your financial goals, rather than make quick profits.