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Benefits of an Investment Club During a Recession

written by: Jason C. Chavis•edited by: Rebecca Scudder•updated: 6/29/2011

During a downturn in the market, let alone a recession, the benefits of an investment club to leverage the minds and abilities of many investors is a bonus. Despite the fact that many of these groups have lost prominence since the economic collapse, clubs remain a viable way of decision making.

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    An investment clubs is a group of people who work together to choose how to make investments and leverage the power of combined resources. During the 1990s and into the 21st century, this form of investing boomed and helped increase the number of people who took part in the stock market. Some investment clubs put money into a combined portfolio, while others simply use education methods to help their members invest for themselves. This can be a group of individuals who meet in person of over the Internet with investment club software.

    Since the recession started in 2008, many of these investment clubs took hits in their portfolios, spurring a number of people to quit the club or withdraw their investments. However, some benefits of an investment club are in the utilization of a market that may be at its bottom as an excuse to redefine investment goals and put in even more money.

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    Strength of an Investment Club

    US Dollar 

    The most important part of an investment club is the fact that it can provide participants with education. If someone is either new to the field of investing or simply in need of a new push to stimulate his or her continued investments, an investment club is essential.

     

    These clubs provide information about the market in ways that one cannot guarantee to receive on his or her own. This benefit stems from the fact that a multitude of people are involved with the club's performance. Instead of simply paying attention to one area of the market, a club can leverage its wide swath of members and target different facets, much like professional money managers rely on multiple market analysts. The larger the club, the greater the ability for new ideas and concepts. This helps get not only one person through a down market, but benefits a collective.

    Above right: US Dollar. (Supplied by Wikimedia Commons; Public Domain; http://upload.wikimedia.org/wikipedia/commons/7/7b/United_States_one_dollar_bill%2C_obverse.jpg)

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    Improvements in Investment Club Software

    While many technologies have been in place for a whlie now to help improve the interactivity and reliability of investment clubs, their use has become even more prevalent since the start of the recession.

    New investment club software advancements have increased the potential of investment clubs in the multimedia market. Applications have been created for cell phones which help an investor keep better tabs on his or her portfolio. Many of these offer increased accessibility of financial reports, cost of transactions and performance reports. They help the individuals within the club to maintain a high probability of finding good information and utilizing that data to make decisions.

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    Resources

    "Introduction to an Investment Club" Investment Club Help (http://www.investmentclubhelp.com/)

    "How to Start a Club" Motley Fool (http://www.fool.com/InvestmentClub/InvestmentClub05.htm)