An investment club is generally a group of people who pool their money to invest together. Club members generally study different investments and then make investment decisions together—for example, the group might buy or sell based on a member vote.

Is an investment club worth it?

Investment clubs are an excellent way to ease into investing without getting burned or ripped off by unscrupulous brokers. Whether you start your own club or join an existing one, you’ll find that being a member of a club is an enlightening experience.

When was the National Association of investment clubs founded?

The National Association of Investment Clubs, or NAIC, was founded in 1951. Since then the name was changed to the National Association of Investors, doing business as BetterInvesting. BetterInvesting is dedicated to providing a program of sound investment information, education and support that helps create successful lifetime investors.

What makes an investment club an investment company?

An investment club may be an investment company under the Investment Company Act of 1940 (1940 Act). If so, one or more states or the SEC may regulate that investment club.

How are investment clubs different from the SEC?

Investment Clubs and the SEC. An investment club is generally a group of people who pool their money to invest together. Club members generally study different investments and then make investment decisions together—for example, the group might buy or sell based on a member vote. Club meetings may be educational,…

What are passive members of an investment club?

The membership would be considered a contract and since they are not participating in the management of the investment club’s chosen securities, the passive members are similar to shareholders of mutual funds. In this case, the investment club would need to register with the SEC. 1