An investment club consists of a small group of individual investors who come together and contribute to a mutual fund to learn and build confidence in order for them to make educated investment decisions. Investment clubs have been around for decades and have provided people with limited funds to take part in larger investments and to get first hand experience and education.
The primary motive of an investment club is make the most money possible and for investors to share ideas and learn about the market. An investment club can be established as a legal entity, either as a legal partner or as a limited liability corporation with a framework that is similar to that of a mutual fund. But unlike that of the mutual fund an investment club does not require its members to pay management fees.
Benefits of an investment club
One of the benefits derived from joining an investment club is the opportunity to learn since there are various researches conducted in terms of what investments are profitable and which arent. An investment club also helps in reducing investment risk since club members can purchase a larger amount of stock at less personal...