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What Is A Value Investors Club? |
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Submitted by Janeane Carnagie
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Investing, especially if you are new to the investment world, may prove to be a daunting task but that was before the introduction of investors club. The creation of investors clubs has opened up a lot of investment possibilities for a great number of people, particularly those that have limited money available for investment. With investment clubs individuals with limited amount of investment are gathered to learn how to invest successfully not just on short term basis but more of a long-term successful investment endeavor.
The goal of an investment club is to educate and then teach its members on how to properly invest their money using various feasible investment methods.
What are the attributes of a successful investors club?
The success of any type of organization depends on how its members treat each other. Good camaraderie and rapport will be able to bring great benefits to the organization and also makes every organizational task easy to accomplish.
A good picture of a successful investors club is one where members enjoy each other’s company as well as enjoying the investment meetings. Likewise, they also agree on the same investment philosophy which has brought them together in the first place.
Moreover, an investors club must also have a long-term buy-and-hold, growth-oriented strategy that will keep it afloat amidst economic downtimes. Aside from that, all members should actively participate in every meeting and stocks should never be purchased without consultation and without any thorough study conducted by the members.
In addition, a successful investors club is one where there is full transparency; meaning that members are given the access to the organization’s computers and/or other online resources. The investors club should also use a unit-based accounting that can be easily understood by members.
Investing styles
There are various investing styles used in an investors club. There those investors that prefer short term and quick profits. These types of investors are called traders. Nevertheless, there are also those investors that value long term investment results and often times are seen building their own retirement funds. This type of investor group and divided into three types and these are as follows:
1. Momentum investors—these investors make use of technical analysis in order to track price fluctuations in the market. Their purchase and sale decisions are based on investor sentiments which is hard to quantify.
2. Growth Investors—these investors make use of fundamental analysis such as growing sales and earnings, good profit margins and positive future business prospects to determine whether a company is worthy of investment.
3. Value investors—these investors also uses fundamental analysis but focuses on different measurements. These value seekers are looking for companies that have very low valuations and offer very cheap stocks which are deemed to grow stronger in the coming years.
Most of the successful investors club prefers to use the fundamental analysis; especially when searching for quality companies with growing sales and profits and high market value.
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