Investment Clubs - Setting up

If youre 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 fund 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 youre 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 youll 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 stockbrokers service. Some brokers offer this free. It will certainly cut down on the amount of paperwork youll have to do.
• Agree whatll 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.

See also our guide to stockmarket investment.

Further reading - there is a handy book worth having a look at. Its "The ProShare Investment Club Manual" and costs £25. Proshare has a regular magazine called the Investor.

Proshare can be found at

4th Floor Bankside House 107 Leadenhall Street London EC3A 4AF

Telephone 0906 802 2222

2009-02-17 00:00:00 © Moneyextra.com