Key Post: Stock Exchange Investment Club

M

Marion

Guest
This was originally posted by Santa Claus

I have heard in the past of a group of people setting up a club to invest in the stock market. As far as I am aware, people agree to contribute a fixed monthly amount to the kitty and investments are made in the stock markets as agreed by the club. I think the Stock Exchange even produced guidelines on how these clubs operate (rules, nominations of treasurer, secretary etc.).

I think the general idea is that the club meets monthly to decide on future investment, review performance to date etc.

Is anybody involved in these clubs?

Would anybody be interested in setting one up?
 
Investment Clubs

The guidelines you are talking about, published by the Irish Stock Exchange can be found here www.ise.ie/invstclub/frcontent.htm. This is also a useful link
www.proshare.org/

I am a member of such a club. After a rocky start where our broker went bust, we are back on top form beating the market by a good margin.

They are an excellent way of investing directly in shares if you do not have the means to do so on your own. They are also great fun.
 
Investment Clubs

Sarah

Can you give some more details of your club (how many members, how much do you contribute, how often do you meet etc). What is the breakdown between male/female? What are members occupations?

SC
 
Investment Club

12 members, range in age from 20 to 50, mostly in 30s. Everyone contributes £50 per month. Homemakers, IT people, secretary, accountant, entrepeneurs, student, gardener. We all knew each other well so there was already an element of trust there.

Meet every 2 months or so in the local hostelry, set Chair, Treasurer and Secretary but we rotate who gives presentations / picks for the coming period, and then vote. Our run away winners have all been "tips" which we then researched, however we are also sitting on some duds without the courage to sell.

We have a contstitution we got from proshare and bank account with 2 signaturies (we asked nicely and have no charges). Its been going about 18 months.
 
.

Forgot to say mostly women (hasn't research proved that female investment clubs do much better than male ones?).
 
Investment Club

Hi Sarah,

do you make your investments through an online or a traditional broker, and what sort of fees/commissions do you pay ?
 
Investment Club

hasn't research proved that female investment clubs do much better than male ones?.

I would be surprised if it did. Can anybody provide any relevant information? In line with the theme of making sweeping statements backed up by no information in particular I seem to remember it being mentioned that investment clubs in general tended to do worse than individual investors holding long positions on shares since the club members tend to have divegent views on investment strategy and clubs also tend to make regular acquisitions/disposals thus incurring higher transaction costs.
 
Women are better investors!

Aha, CM I found it

[broken link removed]

Hardly conclusive but backs up my statement somewhat.

From purely anecdotal experience, the men in my investment club are much more pushy to sell rather than hold, and tend to not be as thorough with the research, also the women tend to have a more in depth consumer knowledge (go on crucify me for that.....)

As for bokers - we use an online broker, £30 per trade (I think), if buying in the UK we use a UK broker.
 
Women are better investors!

Hardly conclusive but backs up my statement somewhat.

Apart from the fact that this "report" seems to be US specific, the summary also lacks a certain rigour in my opinion dealing, as it does, in intangible attributes like "patience", "open-mindedness", "ethical" etc. If you can refer us to a more thorough, objective and statistically rigourous report please do and I'll gladly read it.

From purely anecdotal experience, the men in my investment club are much more pushy to sell rather than hold, and tend to not be as thorough with the research, also the women tend to have a more in depth consumer knowledge (go on crucify me for that.....)

You're obviously hanging around with the wrong men so. :lol You know - it's really not that hard to differentiate between one's own limited experiences and gross gender orientated generalisations if you try. On the other hand if you are going to generalise at least do so based on your own personal, rather than anecdotal, experience. :rolleyes
 
Good News & Bad News, CM

Which do you want first ?

Bad news is that there is academic research to support Sarah's contention. Try this link to a paper by Terry Odean & Brad Barber faculty.haas.berkeley.edu/odean/papers/gender/gender.html .

Good news is that their work also supports your view that investment clubs tend to underperform faculty.haas.berkeley.edu/odean/papers/clubs/clubs.html .

Odean is a much-quoted, and somewhat idiosyncratic, US drop-out turned academic, who has made a name for himself in the field of behavioural finance by using the records of online brokerages to study the trading habits of individual investors. His main conclusions will be grist to the mill of <!--EZCODE ITALIC START--> the Boss <!--EZCODE ITALIC END--> and his disciples. Individual investors are overconfident, trade too much, attribute their successes to skill and their failures to the market, sell their winners and cling on to their losers, and generally underperform the market by a substantial margin.
 
Good News & Bad News, CM

Thanks for the links Dynamo. Great Debates here we come ... ?
 
was in one of these type investment clubs - not anymore though.
putting monies into bricks and mortar - much better for me anyway.
Learning points - don't invest what you cannot afford to lose;
unless you really know what you are doing long term investment in stock is better;
watch out not to trade on emotions instead have recognised in and out points;
and yes believe it or not women are well reported to be better in these types of clubes. I think it is down to them being more thorough before buying or selling where us men tend to shoot from the hip but don't quote me on that!
 
Whatever about the pros and cons of investment clubs (and I personally reckon that, in general, the latter outweigh the former) it should be noted that equities and property are not either/or investments and anybody aiming for a well balanced savings/investment portfolio should have some of each (directly or indirectly) - including their PPR.
 
Sherman said:
Wow, prize to Leon for best resurrection of an old thread ever? :D
Click to expand...
Sorry, did not even notice the original date. only new to site, was just browzing the key posts and had very recent experience with clubs
 
Not at all, well done for taking the time to actually browse the key posts, unlike the vast majority of posters!
 
Leon - if you are interested there are several other threads on investment clubs which you can find by searching/browsing. Search for "TICN" for example to find a few.
 
Thanks Leon .. i've been looking for some non-TICN investment club posts for ages and couldn't find any!
 
Hi,

2 of us in Cork looking to join a non TICN club, don't mind buying in...

PM me if you have opportunity
 
My sister and I are about to set up our own investment club. Does anyone have a recommendation for a straight-forward book on tactics / strategies to get us going?
 
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