Investing Communities

An investing community is a group of people who agree to pool their money, usually a small amount each month, and invest it in the stock market or some other form of investment such as real estate. An individual may not have enough money of their own to invest, and may not have the time, interest, or expertise to research potential investing opportunities or to evaluate the effectiveness of current investments. Moreover, the presumption is that a group will be more profitable than an individual as the knowledge of the whole group is applied to investment choices. With the tasks divided and often rotated among group members, each member has the opportunity to learn about each part of the process with the urging and support of the group. Often, investing communities start with virtually no knowledge within their membership about even basic issues, such as how the market works, means for determining where to invest, or how to read an earnings report. As a result, groups often begin by reading popular books on investing and discussing the highlights with each other just as a book club would, or each member is assigned one of the popular how-to investing books and reports on it to the group. There are even books about how to form an investment community, or club, as they are often called.

In addition to providing safety in numbers, investing groups mean investing is cheaper because larger amounts of money are invested at once and minimum investment amounts are more easily obtained. For some, investing communities are attractive because they allow a hands-on, feet-in-the-fire experience that investing with professionals is designed to eliminate. Moreover, members become empowered through the investment process as they are encouraged in their educational journey by a collection of people literally invested in their success. Investing communities have been around for decades, and more than 32,000 investment clubs with over 500,000 members are registered in the United States with the National Association of Investors Corporation (NAIC), a nonprofit organization originated more than 50 years ago to help individuals and investing communities understand the basics of investing and to facilitate their success.