Online Investing For Dummies
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To connect with other online investors, you might consider an investment club. Investment clubs are typically gatherings of investors in a certain geographic area who meet at a local restaurant or a member’s house to shoot the breeze. Members pitch stocks they think the group should buy or sell.

Investment clubs also have a bit of a party feeling to them, because they’re usually designed to be fun, educational, and, oh yeah, profitable. If your city doesn’t have an investment club, or if meeting with people in person doesn’t fit your schedule, a few online investment clubs are cropping up. Whether the club you’re interested in joining is held in the local Moose club or online, you may be required to buy in by adding money to a pool of cash.

If you’re interested in an investment club, here are several online ways to get started:

  • National Association of Investors Corporation: BetterInvesting is one of the top associations of investment clubs. BetterInvesting’s Web site lets you find investment clubs in your area. You can also take online classes to work on improving your investing success. And if no investment club is near you, you can find out how to start a club of your own or join an online investment club.

  • The Motley Fool: This site maintains a discussion board where investors in different states can find investment clubs. Just enter the discussion group for your state, called a Folly, and search the messages. You’ll likely find other investors in your states planning a meeting or talking about starting a club.

  • Bivio: If you’d like the friendly and personal nature of an investment club but don’t have time to attend monthly meetings, try Bivio, which offers a collection of online investment clubs. You can search through the club home pages and choose a club to join or even start your own.

  • Value Investors Club: This is a selective group of just 250 members who pick stocks. You must apply to be accepted, and if you get chosen, you must submit two stock picks a year.

  • Meetup.com: This site provides an online way for people with common interests to connect in person. People interested in investing often create meetings or “Meetups” and provide the time and location on the site.

Before you rush out and join an investment club, be aware of the potential drawbacks:

  • Bad decisions by others can cost you. If the loudmouthed guy in the club talks the group into buying a stinker, you’re going to take a bath, too.

  • They give an incentive to tinker. Many investment clubs consider themselves to be long-term investors, or shareholders who hang onto a stock for at least a year and usually much longer. But an investment club wouldn’t be much fun if the members never actually bought or sold anything. That means there’s somewhat of an incentive to be constantly buying or selling investments.

  • Compromise can hurt. Although nothing is wrong with agreement, having several people steering a portfolio sometimes means that there’s no single and coherent strategy.

  • Members’ investing skill levels can vary. Some investment club members are only there for the fun, food, and friends. That can leave much of the grunt work for the few members with the skill or desire to make money in the club.

About This Article

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About the book author:

Matt Krantz is a nationally known financial journalist who specializes in investing topics. He is personal finance and management editor at Investor's Business Daily. He's also worked in the financial industry and covered markets and investing for USA TODAY. His writing on financial topics has appeared in Money magazine, Kiplinger's, and Men's Health. Krantz is the author of Fundamental Analysis For Dummies and coauthor of Investment Banking For Dummies.

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