Your investment club is a business and should be run like one. Anyone who thinks that belonging to an investment club is merely about paying dues and showing up for a meeting now and then is in for a rude awakening. Investment clubs are not passive organizations, and there’s no room for slouches. Everyone has a role to play.
A successful club requires skillful organization and planning. It should meet regularly, at least once a month. The location may change–rotating between members’ homes–but the day should be consistent. For example, try to meet every second or third Saturday of the month.
“It’s no coincidence that clubs that hold well-run, organized meetings generally enjoy superior investment results,” says Thomas E. O’Hara, chairman of the National Association of Investors Corp. in Madison Heights, Michigan. The NAIC has a video that runs through how to conduct a model club meeting. Here are some general club meeting tips:
Start on time and be prompt. The president or vice president should call the meeting to order at the appointed hour. The meeting should last as long as is necessary to cover all essential business. Ideally, it shouldn’t take more than two hours.
Set an agenda. Every meeting should have a game plan presented by the president. Old and new business should be part of the agenda. The secretary should read the minutes from each previous meeting. If the NAIC council representative is present, he or she can update members on upcoming council meetings or conventions. The treasurer should review the club’s portfolio, and give highlights of discussions with the broker, particularly concerning securities the club has already purchased.
Present stock analyses and recommendations. Each member should be responsible for researching a stock. (Clubs that have more than 10 members may want to appoint a stock selection committee). Each member should report his or her findings: whether the stock is a candidate for purchase, hold or sale. Pertinent information, such as copies of the NAIC’s stock comparison guide, should be disseminated among members.
Voting on stocks. There should be an open floor or discussion of stock choices. Club members should vote after a motion is made by the president or vice president. There could be more than decision with regard to buying one or more stocks or selling current holdings. But you don’t have to decide on any given stock right away. If you need more information or time to decide, you could vote again at the next meeting.
Call for next meeting. The president should ask for suggestions for new companies or industries to be considered at the next meeting, and make assignments for the following month’s presentations.
There’s nothing wrong with having a little fun or socializing at meetings, but it should be done after the formal meeting is over. Then, you can turn your attention to refreshments and casual conversations.
Bear in mind that you may want to keep a waiting list of prospective club members. You should always have replacements on hand when a member leaves the group–and eventually, someone