| Stock investment clubs are formal organizations | | | | is a big disadvantage to being in a stock investing |
| created to make investments in the stock | | | | club. Sometimes you may think you have insights |
| market using capital funds pooled together by the | | | | into a particular company that your fellow |
| club members. The clubs are often formed by | | | | members do not agree with, so you may feel |
| groups of individuals who already have some | | | | pressured to go along with ideas you don't like, or |
| common interest, such as working for the same | | | | the club may be unable to reach a consensus |
| company, or membership in another social | | | | decision on a particular investment and be forced |
| organization or church. The investment decisions | | | | to stay on the sidelines. |
| of the club are usually made by consensus of all | | | | If you prefer making your own decisions and not |
| of the members, but the details of | | | | being hindered by the group mentality of an |
| decision-making will vary depending upon the rules | | | | investment club, you may benefit from joining |
| governing the club's activities. | | | | one or more online investment forums. An online |
| An advantage of participating in an investment | | | | forum is a discussion board that facilitates open |
| club is being able to benefit from research and | | | | communication among members who trade ideas |
| insights of other club members. Since you all have | | | | and advice that is publicly visible. Most forums also |
| the common goal of increasing the value of the | | | | have a means of private communication between |
| club's capital, there should be no conflicts of | | | | members. |
| interest or unspoken motives between members. | | | | Be aware, though, that many posters in forums |
| While doing your own research and developing | | | | have underlying motives, such as promoting |
| your own trading philosophy is important, learning | | | | stocks in the hope of benefitting personally (either |
| from others is also valuable. Your investment | | | | by direct payment from the company or from |
| costs may also be lower by pooling your capital in | | | | artificially driving demand for the stock up), and |
| a stock investment club. Lower commission rates | | | | people sometimes claim expertise in areas they |
| and access to a wider range of investment | | | | are not really expert in. As in all things related to |
| vehicles are available to an account with more | | | | your investment activities, use due diligence and |
| capital than you may be able to come up with | | | | filter your decisions using your own intelligence and |
| alone. | | | | investment strategy. |
| Being forced to go along with the club's decisions | | | | |