The benefits of starting an investment club

  • Learn from others and share your experience
    Investment clubs offer members the opportunity to learn from each other. Your club may contain people of varying ages, with different educational backgrounds and experience in a wide range of jobs.  Each member brings something unique to the club, contributing to the rest of the group and learning from them.
  • Build a diversified portfolio by pooling funds
    By combining your money with other club members, you can hold a portion of a diversified portfolio without committing substantial funds.
  • Share the costs and risks of investing
    Investment clubs are usually run with very low costs. There will be some costs, for example brokerage, and possibly the services of an accountant. Sharing costs keeps expenses to a minimum.  At some stage, your club may decide to make a speculative investment. Making such an investment as part of a group means that should the investment be unsuccessful, losses are shared among all club members, so that your individual loss will be relatively small.
  • Have fun while you learn and invest
    Many people find the social aspect to be one of the best parts of an investment club - whether that means celebrating the success of recent investment decisions, or commiserating on less then satisfactory results! Depending on the size of your club, it is possible that you will initially know only some of the members. An investment club can therefore give you the opportunity to meet new people and broaden your circle of friends and contacts.
  • Build your confidence by working together
    Many investment clubs are set up by individuals who are keen to start investing in the share market, but who lack the confidence in their investment skills to invest alone. An investment club provides a way to learn with and from others. It helps, of course, to have a nucleus of members who understand the basics of investing, but educational material about the sharemarket is readily available through good book stores and also the ASX education page.
  • Develop investing skills
    Members of investment clubs often continue to invest independently as well as investing as part of the club. Newcomers to the share market may use an investment club to gain knowledge and confidence before making their own investments. Either way, the club represents a useful training ground. Having to articulate a case for or against making an investment to the rest of the group can help you sharpen your investing skills. This will stand you in good stead when it comes to making your own investment decisions.

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