Investment Clubs - Setting up
If you're thinking of setting up an Investment Club , bear in mind the following:
- Hold a meeting to decide the investment objectives of the club. For example, will you invest for income or growth and how much risk are members prepared to take.
- Agree the level of monthly subscriptions, and how much cash your funbd should have in it before the first investment is made.
- Set up a bank account and decide who the signatories will be.
- Shop around for a stockbroker. If you're happy to use an execution-only service, you may only pay commission of 1% or less. On the other hand, if you want advice, you may pay more.
- Choose how often you'll meet to discuss your investment decisions.
- Decide how the club will deal with the distribution or reinvestment of dividends , and any takeovers or rights issues .
- Decide whether you want to use a stockbroker's service. Some brokers offer this free. It will certainly cut down on the amount of paperwork you'll have to do. When Crest comes into play from the middle of 1996 onwards, sharedealing is expected to be a lot simpler still !
- Agree what'll happen if someone leaves the club - for example, how much notice will they have to give - and what will the procedure be when someone wants to join.
Further reading - there is a handy book worth having a look at. It's "The ProShare Investment Club Manual" and costs £25. Proshare has a regular magazine called the Investor .
Proshare can be found at:
3rd Floor 8-11 Lime Street London, EC3M 7AA England
Telephone: 020 7743 0050 Fax: 020 7504 3627