Best Investment Clubs
Many people are firm believers of the popular saying “two heads are better than one”.
This principle also applies to investment. When you’re with a group of people, the possibility of success in the field of investment also increases. This is why investment clubs have been popular, especially to those who are just starting to invest. Let’s take a look at some of the best investment clubs that have been successful in generating assets and revenues.
What Are Investment Clubs?
Investment clubs are simply a group of people who aims to create an investment portfolio with specific goals. It could be for small businesses, startups, real estate, etc. Joining an investment club allows you to be part of more investments while minimizing risks.
Additionally, being a member of investment clubs may offer an opportunity for you to gain more knowledge about the world of the stock market. You can also gain insights and ideas from other members.
Before joining any investment clubs, it’s important that you know the possible pros and cons.
- Joining an investment club can help you get started easier. It also offers a more affordable way of building your investment portfolio.
- Investment clubs have founders and members who are experts in financial matters. They can also invite successful investors as guest speakers. This increases your educational benefit as a member.
- There are tons of investment clubs that you can choose from, depending on which asset do you want to invest in.
- It presents a great opportunity to network and meet people with the same investment goal.
- The success of an investment club is dependent on the stock or real estate market. Some members may leave the club if those markets crashes. As a result, your potential for earning a profit may also be limited.
- There’s a decline in the number and popularity of investment clubs since their heyday in 1998. Back then there were over 400,000 throughout the US. After the recession of 2008, this number went down to 39,000 in 2012.
- You don’t have full control over your wealth since you’re combining your financial strength with other people. You may need to consult with other members before you can make any investment decisions.
- Investment clubs require your time and money. You will need to attend meetings or conferences. You are also required to pay a certain amount of money every month to help keep the club running. Typically those fees are small and the investment club’s performance should well out-weighs those costs, but some folks prefer saving that money.
5 Best Investment Clubs
Investment clubs offer an excellent way for beginner investors to start investing. One of its most valuable benefits is making the right investment decisions with the help of other members who offer different points of view. Below are the best and most successful investment clubs.
1. The Investment Group for Enhanced Results in the 21st Century (Tiger 21)
Popularly known as Tiger 21, this peer-to-peer learning network was founded in 1999 by Michael W. Sonnenfeldt. The club mainly caters to investors with high net-worth. Tiger 21 started with only six entrepreneurs in New York. In a span of twenty years, they managed to grow their members to more than 640 members in 30 locations across Canada, the United States, and Europe. Members come from all sectors of industry: CEOs, entrepreneurs, top executives, and inventors. Others are still immersed in their own businesses or existing jobs while some members have exited their careers.
Before becoming a member of Tiger 21, you would have to go through a screening process first. Prospective members would also need to have a comprehensive background and credit check.
Once accepted, you would need to pay the annual membership fee of $30,000. There are also confidentiality agreements for members not to divulge any private information.
In an interview, Sonnenfeldt said, “Being a member of Tiger 21 is like having your own personal board of directors, powered by the collective intelligence of a group of exceptionally successful wealth creators, in a confidential setting, with no agenda but yours.”
2. The Lafayette College Investing Club
This investment club is the oldest student-run investment club in America. We can trace its origins all the way back to World War II. Several vets gifted U.S. military assigned Officer John Tarbell $3,000 when he gave them basic investing tips. He used this money to start his own investing club at Lafayette.
The Lafayette College Investing Club has gone a long way since its first stock purchase in 1946. It has gained more than 17,500% and its portfolio now is worth over $530,000.
The club’s unofficial motto is “Investing is for everyone”. It’s one of the most popular organizations on campus, with its members majoring in everything from art to economics. The club could have accumulated nearly $4 million if it reinvested all of its dividends over the years. But the club is focused primarily on education and a huge portion of money from dividends is used to fund field trips, speakers and activities.
3. The Oberlin Finance and Investment Club
The OSFIC (Oberlin Finance and Investment Club) aims to educate those interested in asset management, investing and finance. It provides an opportunity for each member to manage a portfolio of real funds. Currently, this investment club has over $370,000 of Asset Under Management.
The club helps each member makes the right final investment decision. It uses an investing approach that allows the circulation of insights, opinions, and research. In addition, it holds weekly meetings where members discuss its portfolio and analyze the effects of recent market activities on its holdings. Proposals for new investment are also reviewed at these weekly meetings.
4. American Association of Individual Investors
This nonprofit organization was founded by James Cloonan in 1978. It aims to educate individual investors regarding retirement accounts, financial planning, and stock market portfolios. They have programs of education, research, and information to help their members become effective asset managers. The club stands firm in its belief that they are not for profit, instead they serve as an unbiased source of investment information.
The American Association of Individual Investors has about 150,000 members now. These members report that this club has helped them gain investment returns that are consistently higher than those of the stock market as a whole.
AAII.com is the main outlet of educational materials. Some of the site’s content is free and does not require any registration or membership dues. However, best and premium content can be accessed if you pay fees starting at $29 a year. This premium membership gives you access to the organization’s model portfolios, free investment courses, techniques for screening stocks and other benefits.
5. Investment Club of America
With more than 200 members, The Investment Club of America carries a solid track record of success. The club has exceeded market indexes, with more than $24 million investment deals over the last seven years. Most of this success is due to the fact that they take active roles in their investments. It’s a collective effort of the members and Board. Some members offer their expertise with regard to the companies they invest in. Other members, on the other hand, bring their vetting expertise on the table.
The club gives access to investment opportunities. Members can take advantage of the high-level education the club provides as they invite world-class speakers on a monthly basis. More importantly, the club offers unparalleled networking opportunities.
Joining an investment club can be beneficial especially if you’re just starting in investment. You would need all the networking and educational materials to know the ins and outs of the stock market. All of these can be provided by an investment club.
American Association of Individual Investors is the best investment club for beginners. It gives you access to tons of investment information without having to spend a lot of money. More importantly, investing in this club may give you a higher investment return.
If you want to succeed with investment clubs, Tomie Balogun’s Investment Clubs: How to create wealth beyond your pay-cheque by investing with others is a must-read.