You want an easy and fun way to get smart about money? Go clubbing, suggests John Persinos. Investment clubbing, that is.
Persinos is a writer for “Personal Finance,” a subscription-only investment newsletter affiliated with Investing Daily.
In the recent “Making the Club Scene,” Persinos suggests that readers look into BetterInvesting, the Michigan-based nonprofit organization that teaches individuals to become successful long-term investors.
Club members split the profits and expenses, and reap tax advantages, as well as enjoy the companionship, he writes.
“The NAIC (National Association of Investors Corporation, BetterInvesting’s former name) reports that long-term capital appreciation is the top goal of most club members,” Persinos says. “As motivation for club participation, many members also cite a desire to break free of self-serving brokers and indifferent money managers. Another key benefit, of course, is the social interaction and intellectual stimulation of like-minded people. Before joining or forming a cub, due diligence is as important as ever. Always make sure that the club’s portfolio strategy mirrors your own goals.”
“When you find a club that interests you, attend a meeting as an observer,” he adds. “Also scrutinize the club’s track record, partnership agreement, mission statement, and administrative fees. Typically, clubs operate more efficiently with no more than 20 members. The NAIC recommends that each club require members to buy units in the club, with a set minimum. This enables the club to function as a small-scale, personalized mutual fund. The club’s money is deposited in an account with a broker chosen by members.”
Persinos notes that club investments are often as much as several hundred thousand dollars. He also advises that members continue to maintain their private portfolios.
BetterInvesting notes that members typically use the considerable skills they’ve acquired in a club to help with their private investing.
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 born 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 or call toll free (877) 275-6242.