Investment clubs still make sense because they teach bootstrap fundamentals, Reuters columnist John Wasik says from Chicago:
“You focus on how to analyze a company for its sales, earnings and future direction. You scrutinize management for its ability to increase profits and earnings per share.”
Wasik, the author of The Investment Club Book (Warner Books, 1995), explains that he and his family were involved in a club for more than 15 years until they had to cash out to pay for medical expenses.
“What I found in my time in an investment club is learning a complex and often intimidating subject with friends and family is a lot more productive than trying to tackle it alone,” he writes. “There’s a powerful social incentive with investment clubs. With peers or family members, investing can not only be a social event, it offers encouragement to stay the course in all kinds of markets and regularly invest fixed monthly amounts.”
The BetterInvesting website offers information on starting an investment club, as well as how to find a chapter in your area.
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was borne out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks and mutual funds, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at http://www.betterinvesting.org/investing/landing/openhouse/blog/index.html
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