Frequently Asked Questions About Investment Club:
Several people have been asking questions on Investment Club, some Frequently Asked Questions here.
Q: What is an Investment Club?
Ans: As implied by the nomenclature, it is a club – the coming together of like-minds for the purpose of wealth creation.
Q: Is Investment Club a Finance Company or Stockbroking Firm?
Ans: An investment club is not a finance company; neither is it a stockbroking firm. Investment club employs the services of a stockbroking or finance company to realise its goal of creating wealth.
Q: Why an Investment Club?
Ans: Investment club stands in the gap to assist as many as possible save regularly and invest their savings.
Q: How does an Investment Club work?
Ans: Members regular savings through the club are spread over several investment options (shares, bonds, money-market instruments, properties, etc).
Q: How many people can form an Investment Club?
Ans: It depends. It can be formed by local friends. Also it can have a national spread. Oak Magazine Investment Club is ICT-driven and national in spread.
Q: Can individual members choose the type of investments they want?
Ans: Investment decisions are guided by the club’s rules and regulations which will have taken into account the high-yielding investment platforms. It may be set out that 50% of the available money be invested in shares, 20% in money market instruments, 15% in properties, etc. No individual member can influence this.
Q: Who does the investments on behalf of club members?
Ans: A structure is usually put in place. Such structures as Investment Research Committee, Executive Officers, Board of Trustees, and Admin office are put in place. These structures work hand in hand to ensure smooth activities of an investment club.
Q: What is the duration of participation in an Investment Club?
Ans: Individual Members of an investment club are advised to attach their savings and investment activities through the club to projects they may want to carry out in a future date of about 3 or 5 years time. This will enable them reap the time benefit the platform club.
Q: How easy is it for a member to quit the Club?
Ans: Rules and regulation of the club usually takes care of this.
Q: Do members contribute equal amount of money?
Ans: This depends on the structure of the club. A club of not more than 20 members may agree on a regular amount to be contributed by members. Also, a club may be established for several classes of people (students, workers, business practitioners). This type may have different amounts club members can choose from since members are not of same status.
Q: Is Investment Club better than if I invest directly on my own?
Ans: As you know if you invest on your own, you bear the risk of investment alone. Also your money may be small which will not allow you to spread it over several investments. Investment club allows your little money to be spread over several investment platforms because it comes into a pool of money (that may run into millions of naira). Also no individual member bears the risk of investment alone. If any quoted stock goes bad, those that are doing well will not allow members lose money.
Q: How can you convince me that Investment Returns are high and I can make it?
Ans: For instance Intercontinental Bank was as low as N4.42 in 2003; today it is N13.50, Ashaka Cement was N12.95 but today N53; Total Plc was N72.50 but now N187.00. These are yields that are more than 200%. However, you only get this on good investments – the structures of the club will ensure.
Q: How do I monitor my contributions to through the club?
Ans: The club’s admin office and admin officers prepare financial positions of the club activities at regular intervals. A club like Oak Magazine Investment Club is to employ the use of the internet to enable members monitor the club’s activities.
Q: How easily can members make their monthly contributions?
Ans: For example Oak Magazine Investment Club will work with partner banks where members will have their individual accounts. 21st century banking has removed all bottlenecks in fund remittances.
Enjoy my Pen, and stay Financially Fit.
OLA EMMANUEL