Tips For Investment Club Members

by David Jenyns on September 25, 2009

If the investment club strikes you as an ideal answer to your needs and requirements, there are some additional tips to consider.

Do not attempt to form a club until you have investigated its status under Federal, state, and local laws. The Association of Stock Exchange Firms is attempting to win passage for a model statute that will simplify and clarify the status of investment clubs — and in some states is has already been enacted.


Another investment club tip: your club can avoid awkward misunderstandings if the ground rules are clearly established from the start. Provisions should be made for the death or departure of a member. Each investor should be able to withdraw his share of the club’s assets at any time.

Run your meetings briskly. Members will start resigning out of boredom.

The Williston club has instituted an automatic $5 fine for missing a meeting, regardless of the excuse. Some clubs interpret a certain number of absences as evidence of disinterest and as grounds for dismissal.

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