We see investment clubs as a good way to learn stock trading, and gather investment information.
Investment clubs can offer social and educational benefits. For example, they may be a good place to learn stock trading if you are a beginning investor and think you would feel more comfortable learning about investments with others. Some clubs let you invest as little as, say, $50 a month.
Investment clubs do have hidden risks that can hurt your profits. That’s because investment clubs make decisions by committee, where responsibility for mistakes is diffused. When committees make mistakes, they sometimes make big ones.
In addition, investment clubs can produce unexpected personality clashes and unfortunate peer pressures. As well, decisions formed by a group consensus sometimes take on an air of legitimacy and urgency that can cost members a great deal of money.
Learn stock trading: How investment clubs can distract you from pursuing a sensible, conservative investing strategy
Let’s say, for example, you join an investment club that picks up on one or several investment themes or fads. You could feel pressure to do the same in your personal investing. (The risk with theme investing is that you could let the theme or fad become your overriding investment consideration, and distract you from other measures of value and risk).
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Or your investment club could invest in ways we don’t recommend, like using a sector rotation approach (where you underweight or overweight your holdings in certain sectors based on a forecast of the stage of the economic cycle, or other factors) or relying too heavily on technical analysis.
Our advice? Look for investment club that follows a conservative investing strategy like ours
The best way to learn stock trading in an investment club with less risk is to join a group whose philosophy has something in common with our three-part TSINetwork investing strategy: invest mainly in well-established, dividend-paying companies, spread your money out across the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; and Utilities); and avoid or downplay stocks in the broker/media limelight.
This approach helps you avoid overloading yourself with stocks that are about to slump because of industry conditions or changes in investor fashion. You also increase your chances of stumbling upon a market superstar — a stock that does two to three (or more) times better than the market average.
In addition, if you do join or form an investment club, make sure that in the initial planning the group carefully creates and follows a partnership agreement and organizational by-laws.
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The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
This privacy policy is applicable to all TSI Network Visitors, Clients, Employees, Suppliers, Web sites, Management, and all other interested parties. Any links to or from our site are not covered by this policy. We encourage you to read the privacy policies of every site that you visit.
The privacy of the site/store visitor is very important to TSI Network, and is respected at all times. The information we receive from customers helps us to personalize and continually improve your online experience at TSI Network.
We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
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We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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Does TSI Network Use the Information It Receives?
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TSI Network may revise this Policy from time to time.
Legal Notices and Disclaimers
The contents of this web site and our publications are based upon sources of information believed to be reliable, but no warranty or representation, expressed or implied, is given as to their accuracy or completeness. Any opinion reflects the Successful Investor’s judgment at the date of publication and neither the Successful Investor, nor any of its affiliated companies, nor any of their officers, directors or employees, accepts any responsibility in respect of the information or recommendations contained in the publications or on this web site. Moreover, the information or recommendations are subject to change without notice.
Information presented on this web site or contained in our publications is not an offer, nor a solicitation, to buy or sell any securities referred to on the web site or in the publications. The material is general information intended for recipients who understand the risks associated with an investment in any securities referred to in the publications or on this web site. The Successful Investor has made no determination regarding whether an investment, course of action, or associated risks are suitable for the recipient.
