Basically we had a 'group' of about 30 members at one point. The problem was that there were 5 members MAX that actually gave a shit and did stuff for the group. I started this group and at first it was great and then later you sit there and think - why am I doing all this work when noone else cares? So, I took a step back and let someone else take over. The club no longer exists.
I think there were people there that just wanted to be spoon fed ideas. When it came to actually doing some work on their own, they always seemed to miss those meetings. We tried a yahoo message board and same thing there - the same 5 or so people posting and everyone else just reading their thoughts.
When I was a stockbroker, I would give talks at investment clubs as well. In my time as a broker, I only found ONE club that was successful. And I think the ONE thing that kept them together was the fact that it cost money to buy into the group. You bought 'shares' of the investment club. They basically created their own, personal mutual fund. The money was invested based on members input and the buy in was substantial - at the time around $10k each. When you have $10k invested and know that you have a say in what happens, it appears that people actually cared and did their work. I loved working with this club. $10k in the overall picture is not a lot, but for a 'club' you typically attract those that are serious.
Another club I worked with had a $100 buy in, had 10 members at the max, and there were 2 at the most that actually did something. That club lasted about 6 mo's.
So, after working with clubs and trying to run one, my suggestions are:
1) Have a buy in and start a 'mutual fund'. This buy in must be high enough to get rid of the tire kickers and those just looking for free ideas.
2) Have meetings at least every 2 weeks. We tried once a month and it's just too easy to start missing meetings.
3) Make everyone accountable somehow. And if they don't do their job, they are out.
4) Depending on who you attract to this, keep communication open and often - whether that's a chat room, message board, email list, etc.
To be perfectly honest cash, after going thru all this myself, I would not bother trying to start one. It's just my opinion but I think the 'risk-reward' is not in your favor - you are risking LOTS of your time and money to start this and the reward is going to be small at first. Over time it may pan out, but it may never reach that stage.
Idea... instead of starting a 'club' with people that live near you, perhaps start a 'virtual club' with traders here on ET... With services like hotcomm, paltalk, etc. you can put something together fairly inexpensively. Just an idea.
