Investing groups can be found in many municipalities in Canada. Investors want to become part of something big, something more meaningful. Investing groups have been around decades.
They require minimal investment and regular people can partake in bigger investments first-hand. An investing group is simply a pool of people, who pool their money to invest in a cause. Causes include but are not limited to buying stocks, investing in property etc.
As much as investing groups are profit-centric they are the best way of sharing ideas, learning new and upcoming trends, and meeting new people.
If you want to join an investing group you will need to first know what kind of group you want to join. You need to educate yourself as much as possible before joining an investment club.
Take time to learn about stocks and bonds, about how they move and how they are traded. Talk to a financial planner or a broker for advice, as they will help you take control of your money. They will teach you financial strategies that will help you grow your money rapidly in an investing group.
Investing groups are not regulated by the Canada Securities Exchange but however in exceptional circumstances a need to register my arise. If all members participate in the group then there won’t be any need for the investment group to be registered with the CSE.
Before joining an investing group you may need to consider these:
- You need to consider if there is a legal limit for the investing group membership. Usually, a club consists of 10 – 20 members.
- Know if the investing club will require you to pay a monthly lump sum.
- Build the knowledge of the club’s investment style and it’s investment objectives so that you can plan for your money.
- Know the frequency of meetings with members if it’s going to be every week, every two weeks, every month and so forth.
- Find out if the investing group is a legal entity so that as a member you can be the joint owner of the entity.
- Know how the club operates. Identify if the club is one where members buy and sell investments collectively or as individuals.
The following are 4 ways to join an investing group
- Look for investing groups on Facebook
Facebook is a rich tool for socializing. If you want to do anything that is social then Facebook is the way to go. You will find hundreds of Facebook groups dedicated to investing groups. All you need to do is search on Facebook and join groups in your area or around Canada. Look out for scams while you at it. Don’t give out money to anyone without making confirmations.
- Ask around your area
Your neighbours may be involved in investing groups near you. Don’t be shy to ask around your neighbourhood for investment clubs. There are money clubs around and all dedicated to achieving a specific purpose. If you join an investing group in your area you will get to know your area better and make friends nearby.
- Search the web
You can Google your area to find investment clubs that are nearby. With Google you can ask for results of a specific club that you want to join. You will be surprised how many clubs are within your area.
- Visit a model club meeting
Get free networking tickets online and attend an event near you. You meet new people who are in industry and business. You will get so much exposure in investing groups. In networking meetings you will find members of investing clubs and they will help you gain membership. They will advise you and show you how they do their business. Check out this link for more information.
- Think long term when you invest in an investing group. Think of making money after a year or so. Trying to make money in a short space of time is a bad approach. Short time approach makes it difficult to manage the group’s money and can be an administrative burden. Selling stocks quickly instead of holding them will lead to destruction so buy and hold stocks. When joining check membership activity. Know how many members leave the club in a year. When you are doing it for the long term then you need to know if members are here to stay. If members leave rapidly this will jeopardize your investments since you may need to liquidate members’ contributions. If there are penalties on early withdrawal then the investing group can be highly considered.
- Join an investing association. Join an association such as better investing. This club will better you in understanding about running an investment club. Alternatively, you can join the Association of Canadian Intercollegiate Investment Clubs and interact with students who are passionate about finance and investing.
- You need to define your style. It is important for an investment group to have an investing style. The style needs to be written and communicated to members. It is somehow the vision of the group and it must be practised perpetually. Identify if you are going to specialize or diversity. This should be accompanied by a strategy to implement.
- In investing groups, education is key so value it. Profit is the main reason why the group started. However, you have to have more than 10 people with knowledge around you. Learn from these people and become a star investor. The investing group should set minimum education standards for it to succeed in reaching its goals. Members need to outline their level of expertise before they join the group. All members should participate equally in the group. It is not a charity so everyone needs to earn every dollar that they pocket.
- Investing groups are one of the easy ways to introduce yourself to the investing world. The biggest advantage of an investing group is that documents and financials can be analysed by different people. You will be more enlightened as a member of an investment club and you will also learn new skills.