Is The Investment Club Is Making a Comeback?
Social investment clubs were a ‘thing’ of the nineties stock market boom times as the dotcom bubble happily inflated and took amateur investment enthusiasts along for the ride. While the ratio between ‘investment’ and ‘social’ focus varied significantly from club to club, the general idea tended to roughly be the same. Members would pay in a monthly contribution, which would either be flat or tied to the individual’s preference or means, and the club would invest together in consensus stock picks. Profits, or losses, were shared relative to
At investment club meetings, members would take
Meetings would probably be monthly and probably held in a local pub, or
We’ve spoken in the past tense up until
“It appears there is an ever-increasing appetite to be part of an investment club”.
One major drawback, however, is that when investing through a club structure shares cannot be held in an ISA or SIPP so don’t benefit from the tax shelter these wrappers provide. However, some investment club members also have their own personal ISA or SIPP portfolio that is either influenced by or mirrors their investment club’s holdings.
Investment clubs are also a great way for beginners to start investing as they can learn and be guided by more experienced members while they get to grips with the logic behind investment decisions by listening to debates around stock picks. For those interested in potentially joining an investment club, the best option would be to be referred through friends or family to an existing club open to new members. Some also actively encourage new members who live nearby and have Facebook groups or websites that can be found. Or, you could always start your own with friends and family keen to dabble in the stock market, mixed with a monthly evening at the pub!
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.