investment clubs

The first investment club in the States started more than 100 years ago and there are now some 60,000 clubs with more than a million members in the US. Clubs are fast becoming just as popular here as the idea captures the imagination of people in the UK. The reason? Investment clubs are a great way to increase your knowledge and ability as an investor, in a friendly and fun environment.

Whether you are an experienced investor or a complete novice, there are many reasons to get involved in an investment club.

If you are a new investor, there is no better way to start investing as the stock market can be a daunting place for a lone investor. In a club situation, risks are shared as you are pooling your subscription as part of a group of up to twenty people. Better, more sensible decisions tend to be made collectively as you share your knowledge with others. You may have no knowledge about the stock market itself, but you will certainly have knowledge from your work, your hobbies or just life in general which will mean that you have expertise of a particular industry, company or service to contribute to club meetings - and your confidence will soon grow. Many clubs have an educational programme for new members and you will be surprised how much you pick up from reading newspapers, listening to relevant programmes on the TV and radio, the internet and ProShare's Dividend magazine. If you are an experienced investor, you will enjoy sharing your interest with friends or colleagues and while you might give some less experienced members the benefit of your stock market knowledge, you will certainly learn something from other members because they will have knowledge of different sectors and companies through their work or leisure pursuits. The research involved in investigating companies can be shared between members, as can the cost of information.

The secret of investment club success is that every member becomes involved in finding out about the companies that may be chosen for the club portfolio. It's no use leaving it to the others, the job of finding out these facts must be shared. That way you are contributing effort as well as opinion. It is this pooling of knowledge, as well as resources and money that is the beauty of an investment club and makes it a relatively risk free way to get involved in the stock market.

Who are Proshare?

ProShare is an independent, not-for-profit organisation limited by guarantee and founded in 1992.

ProShare was founded by HM Treasury, the London Stock Exchange and a consortium of major companies to "Promote responsible share based investment, including employee share ownership, primarily through education and research." ProShare (UK) Ltd is currently funded through charitable donations from over 180 companies and by grants from the London Stock Exchange, The Gatsby Charitable Trust and The John Templeton Foundation. Investment Clubs The face of ProShare Investment Clubs has changed beyond recognition in the last few years. ProShare took on the National Association in 1993 and since 1997 the number of UK investment clubs has increased from just 350 to approaching 7,000 clubs - an increase of some 2000%. 60% of people joining an investment club have never invested before and within 2 years a high proportion have begun a portfolio of their own.

Employee Share Ownership

Proshare estimate that there are currently 5,000 companies in the UK operating Employee Share Schemes with around 3.5 million employees participating.

Want to find out more? Visit the Proshare website at www.proshare.org to find out about:

Setting up your own Investment Club
Employee Share Ownership Schemes
Seminars and Training Courses

Membership of ProShare Investment Clubs is FREE for the first year and offers:

A regular magazine 'Dividend' for each of your club members, containing investment club news and views and guidance on investment club techniques.
A free copy of the latest issue of REFS (Really Essential Financial Statistics) - with details of every London Stock Exchange company and worth over £55.
The opportunity to set up your own Free club Website and email with ProShare's dedicated Internet service - No experience is needed. A bulletin board service and portfolio management software are also provided.
Access to ProShare's investment club Helpline that provides answers to your questions on setting up and running a club.
Free entry into national newspaper competitions exclusively for ProShare clubs (There is £48,000 to be won across the competitions every year)
A Chance to enter our prestigious Annual Awards competition with a prize fund of £9,500
Attendance at investment club seminars in your region to enable your members to become better investors.
Regular 'Special Offers', available exclusively to ProShare investment club (PIC) members.

Investment Clubs : Case Study
The Wigs Investment Club

This club started early in 1997 under the watchful eye of Dr Moira Hamlin. It seems that fate intervened to ensure that she had no choice but to set up a club when in a matter of days a radio programme and an article in an American edition of Vogue both featured investment clubs. Taking the initiative to obtain a copy of the Beardstown Ladies’ book from an American publisher, she was inspired by their story and decided to recruit some of her friends and business acquaintances. As Moira explains: "The unifying factor between the members was that we were all independent professional women, but had little idea about managing their own finances. I, for one, felt rather guilty about this." So out of this enthusiasm, the W I G S club was born (it stands for Women Investing in Great Shares). The members decided from the start that they would only put money into the club that they could afford to lose. By treating the money as spent, they thought, the meetings could be lively and fun. Subscriptions are limited to £30, up from £25 at the start. Although the club was intended to be a fun and sociable, the members felt that it was important to set themselves out on the right footing. Since the outset there have been teaching ‘slots’ at meetings where in turn members are tasked with finding out about such investment principals as PEG’s. After the first year or so it was extremely pleasing to see that from as they describe it, "not knowing one side of a balance sheet from another" that members were discussing (and understanding) p/e ratios and EPS as well as any expert stock picker. Although it started with a clear strategy, the club still took a good year to find its footing. The first lesson was losing a couple of members because they had different expectations from the majority of members and found the meetings too formal. Like most successful clubs, the WIGS felt it important to have an agenda and structure to meetings. They now have 8 members, and are very happy with their current membership. The club members are scattered in Bristol, Somerset and one member in Northamptonshire (who makes a four hour round trip to attend meetings) and meet monthly in a hotel north of Bristol. One thing they have learned is that it is not wise to choose shares on an empty stomach, as they tended to rush through meetings to speed up the meal. A light meal now precedes the meetings. The WIGS have 20% fun money, which is used to invest in more ‘racy’ stocks and keeps and element of interest to their monthly meetings. They also have one sensible ‘blue chip’ in Royal Bank of Scotland that they bought for £8 and will sell when the price reaches £15. Moira Hamlin puts the success of the club down to the fact that the members really enjoy meeting up and finding out what has been going on in each other’s lives over the last month. They are comfortable with each other and are not afraid of making their opinions known when discussing the latest investments. She feels that the club’s monetary success is only second to the fun that the members have had learning about the stock market, although she admits that this might not be so true if the club had made a loss. What is extremely encouraging is that all members have now started their own portfolios. ‘Women, in general have more staying power and perhaps are better working in groups. They tend to be co operative rather than competitive. When things get tough, the glue that holds you together is the social side.’- although she is quick to add that there are many male and mixed investment clubs which work very well.

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