Stock Clubs

Stock Investment Clubs are an excellent way to learn about investing in common stocks. If you are not already a member of a club, we highly recommend you learn more about them.

Stock clubs are groups of individuals who study stock investment, pool their money, and purchase stocks. Stock clubs often perform better than professional money managers. Many stock clubs have successfully invested for years, building a substantial portfolio of stocks. This provides an opportunity for members to learn about investing by actually investing!

You need to take several steps to form a new stock club. First, you will need to determine the legal form that will be used for the club. Most clubs are formed as partnerships, with each partner responsible for claiming their share of gains, losses, dividends, and expenses on their individual tax returns. The club will also have to file federal and state partnership returns. Regulations vary by state, so check with your state's department of revenue before forming your club.

You will also need to draft a Partnership Agreement and By-laws for governing your club operations. The Partnership Agreement details how members join the club, the minimum amount each person must invest, and proceedures for a member's withdrawal from the club. By-laws can be used to define the less formal rules of the club, including rules that require members to have email, when elections are held, etc.

To learn more about stock clubs, visit:
Stock Central
or
NAIC (Better Investing)