(Image credit: Getty Images)We probably all wish to have a friendship like Warren Buffett and Charlie Munger. Decades of enjoying each other’s company – and generating a market-beating annual return of nearly 20%.Their story seems to prove the adage: two brains are better than one. Together, they achieved more than either likely would have alone. That might be worth consideration for those who aspire to become a better investor.As Buffett put it: “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours, and you’ll drift in that direction.”Subscribe to Kiplinger’s Personal FinanceBe a smarter, better informed investor.
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Sign up for Kiplinger’s Free E-NewslettersProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.Profit and prosper with the best of expert advice – straight to your e-mail.This kind of camaraderie may help explain why investment clubs are coming back into fashion. Easier access to markets through apps, strong stock market performance and exciting new assets like cryptocurrency have all drawn more people into the investing world.An investment group or club can be a good place to start, especially for those eager to learn by doing. But should investing be a team sport? Here’s what to know.What are investment groups?An investment group or club generally brings people together people to pool modest amounts of money. The goal is to build a portfolio, learn about investing and apply those lessons to their respective personal finances. Members can include friends, family, coworkers or even strangers brought together through investment club organizations like BetterInvesting.Investment clubs have existed for decades. Charles Sachs, CFP® Ambassador and chief investment officer at Kaufman Rossin Wealth, even credits his career to his early involvement in an investment club. “I got involved in investment clubs and, shortly thereafter, had to start planning my mom’s retirement and estate planning. I found that I really loved doing this for a living. Fast forward 30 years, I’m now doing this for many clients.”How investment groups workInvestment groups often resemble social clubs where members share and debate ideas. Most clubs consist of six to 12 people, meeting monthly to discuss and vote on investment ideas like the best stocks or exchange-traded funds (ETFs) to buy. Between meetings, members stay connected via email or text.After an initial lump sum, members typically contribute $50 to $100 each month, with larger contributions granting a bigger stake. Clubs need a system to track each member’s share of assets as members may join or leave.Most groups open a brokerage account, often in the group’s name. Formalizing as a legal partnership or LLC isn’t required but can simplify accounting, provide liability protection, and ensure proper tax documentation.Investment groups can also have spec
Mer. Gen 8th, 2025
