Five Benefits Of Joining An Investment Club.
Think how sure they were it was going to make them rich. And yet... they ended up losing money. Why? Because they didn't take the time to learn what good investing was about. They were going on a tips. The shame of it is so many people fall for that tract of investing. They want to make the quick buck and instead get burned in their efforts.
If you are a novice to investing in the stock market, how would you like a simpler, faster way to become a better investor? I bet you would. There is a way. And this tract will probably also give you better odds of growing your investment capital.
Are you wondering what that tract is? Here’s the answer - Join an investment club.
You see, the most significant reason for choosing to be a part of an investment club is that you commit yourself to learning more about investing in the stock market. Learning is the key. And here’s the good news: You will have a few other people joining you on your journey. There's safety in numbers.
For instance, if you know you're not the only club member who's clueless about price-earnings ratios or estimating future growth rates, you probably won't be as self-conscious about asking questions and struggling to grasp new investing concepts. But that is only part of the picture. Investment clubs offer you a number of definite advantages.
Let's take a look:
1. Far More Perspectives: By their nature, investment clubs frequently and inadvertently draw together people with differing opinions of the world. That can be important because it means a wide diversity of perspectives are added to the mix when discussing the pros and cons of your monthly stock study.
Furthermore, when you listen to your fellow club members share their thoughts about a stock, regardless whether you agree with them, you're gaining knowledge about how other people make judgments that you'd never get reading a book at home alone. That in and of itself is good as gold.
2. You'll Have Safeguards: Occasionally, making decisions in a club keeps you from making mistakes when you're buying and selling stocks. Convincing yourself that you've found the absolute best, most perfect, guaranteed-to-rise-in-price stock that's come along in the history of the stock market is all too easy. In a club setting, however, your believing the stock will be a winner isn't enough - your fellow club members must also be convinced. Many times, someone else in the club finds a rationale (or two or three) why the stock may not be such a superb buy after all. The club's collective brain often is smarter than the brain of an individual member. At some time, you might discover your sure thing was a half-baked idea.
3. Probably Better Performance: The club approach seems to work nicely when it comes to investing in the market. According to annual surveys conducted by the National Association of Investors Corporation (NAIC) of the stocks most extensively held by investment clubs, club holdings beat the overall market. In the long run, chances are you'll do much better than trying to invest by yourself.
4. You'll Find It More Affordable: Another great benefit of investment clubs is that your minimum monthly membership contribution usually is relatively small. If you think about it, even if you're living on a shoestring salary and can't put away much money toward retirement, you can probably afford $20 to $40 a month for club dues. You're immediately putting that money to work for you, and someday when you have even more money to invest, you'll be able to use the investing skills you develop with your club to build up your own personal portfolio.
5. Finally, there is Increased Purchasing Capacity: By participating in an investment club, you're combining your small investment with the investments made by many other people. This enables all who participate to make investments you probably couldn't make alone. And it will keep your commission costs much lower than if you had been investing all by yourself.
Here's why that is important: The higher the percentage your commissions are of the total amount invested, the less money you are able to invest. Let's say you don't have thousands of dollars to start investing on your own. The investment club makes it much more inexpensive on a percentage basis than you can do by yourself.
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