What happens between meetings?

While the main focus of an investment club is the monthly meeting, there is also work to be done between meetings.

Stock research

Part of the monthly meeting is likely to be the presentation by club members of research on various stocks that the club is considering buying or selling.

  • You may volunteer to research a stock that is of interest to you, or that the group is considering investing in. If the club decides to invest in this stock, you may take on the responsibility of being the stock’s ‘champion’ – keeping informed on company announcements, staying up-to-date with trends in the industry, and monitoring price movements on a daily basis. The ASX website www.asx.com.au can be of assistance here. Setting up a watchlist of stocks can be particularly helpful.
  • Research is not limited to a particular company. You may wish to present a report on an industry sector, rather than on an individual stock. Your club may want to find out more about other products such as warrants or listed managed investments, and nominate a member to find out more about that product. The time between meetings is ideal for learning more about investment opportunities and taking that knowledge to share with your fellow club members at the next meeting.

Buy/sell actions at agreed price triggers

Investment clubs taking a long term investing approach usually make investment decisions at their monthly meeting and tend not to trade between meetings.  You may decide, however, that you want to have processes in place to enable you to take action between meetings.

  • Your club may set price points to take certain action, such as selling all or part of a share holding, or buying a share. Significant price movements can take place in the time between monthly club meetings, and having a mechanism in place by which action can be taken avoids having to wait until the time of the next meeting. Such a policy must be clearly articulated and agreed to by all members to avoid any confusion. The policy should be set out in the Partnership Agreement or the Rules of the club.
  • You might agree that members can communicate on an urgent decision via email or phone and vote on action to be taken. Another approach is to make each stock’s ‘champion’ responsible for monitoring that stock’s price. If there is a significant movement in the stock’s price, that person must identify why it has happened. Then, if necessary, in consultation with the chair, they have the authorisation to instruct the treasurer (or whoever is responsible for placing orders to buy or sell with the club’s broker) to sell the shares.

Preparing the monthly financial report

Each meeting should include a short presentation by the club’s treasurer of a financial report.  The treasurer should prepare this report as close as possible to the date of the meeting to ensure it is up-to-date. 

Download example accounting forms, blank templates and instructions

The Unit Valuation accounting system is one method used by investment clubs to keep account.  A summary of the UVS appears on Valuing member holdings. The system depends upon the completion each month of four forms. This should become a simple and routine procedure, however they must be dealt with regularly and methodically. The four forms which provide the framework for the UVS are: Cash account, Members capital account, Investment record and the Monthly asset statement.

  • Instructions for completing Keeping Account forms (PDF 53.8KB)
  • Example forms (XLS 48.5KB)
  • Blank templates (XLS 82.5KB)

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