If you were offered to join an investment club by paying 20$ a month would you?
By Gramora
@Gramora (23)
United States
December 9, 2006 8:02pm CST
I just recently finished studying all I need to know about starting one of these. I have already been active in trading stocks, but I would love to have something that made more sociol and fun. So I think this would be a great idea. It would work something like this: People would come togethor to form a legal partnership or LLC. They would then sign an agreement stating that they would pay x dollars a month for the club\business to invest in. They then would elect a manager who would bring the money to like edwards jones or an online broker to invest with. Also they would elect like a secratary and an alternate for the manager if he\she gets sick. Whenever the partnership makes money through dividends or selling stock, they would put this in an interest bearing account until they decide what they want to do with it.
If someone came to you with this idea do oyu think you would join it? It would be a cheap and safer way to get into the stock m,arket and potentially save for retirement or create a potential second income. What are your thoughts and ideas on this?
2 responses
@redyellowblackdog (10629)
• United States
11 Dec 06
No, I would not. No one I know who trades stocks would take you up on this deal. Did you read what you proposed?
You are asking a bunch of people to contribute a monthly fee to a person who invests their money for them.
Unless that person doing the investing is a regestered investment advisor he is breaking the law.
It is against the law to control and invest others money in the stock market without meeting certain qualifications.
What you are proposing is more like some kind of mutual fund or something else of a similar nature.
The investment clubs I'm aware of have members' meetings where different members present their reasoning for why different stocks should be invested in. Then the members vote on which stocks to invest in. No one person has a say on how others money is invested. If one person controls and invests the others money, it is more than an investment club and probably falls under government control.
So, if you go ahead with your plan, you might want to consult a lawyer knowledgeable in securities law. I am not a lawyer, but you need to speak to one before starting such an investment club.
@DeborahGalasso (275)
• United States
11 Dec 06
I dont know, it does seem like a good idea though Did you think of that or did you research it
@Gramora (23)
• United States
11 Dec 06
Well its a fairly common business practice if a group of friends has a business savvy person who can take the like half hour each month to do the book work and invest the money. I'm the business person in family so I'm trying to get the family to start doing it since no one has actually bothered to invest in retirement beyond the standard PERA account. Partnerships are really quick and easy to create if all the peopel joining them are in the same state.
@redyellowblackdog (10629)
• United States
11 Dec 06
http://www.mylot.com/w/lists/13_39067/default.aspx
At the url above is a mylot list of people whose interest is the stock market.
