This is the TimeToTrade help wiki. Use the TimeToTrade Trigger Trading Technology™ to execute your trades when Price, Candle Stick, Trend Line, Volume and Technical Analysis chart conditions are met - no coding required. Trade directly in the world’s global markets. Backtest your Trading Strategies. Calculate your UK HMRC Capital Gains Tax liabilities. Manage your Investment Club.

Investment Club

An investment club is typically formed by a group of individuals who want to learn how to invest in the stock market by pooling together a small amount of money each month. Not all investment clubs invest in the stock market; some decide to invest in property, trade FX currencies, or artwork for example.

Investment clubs provide a supportive environment where investors can learn how to invest by sharing knowledge and experience, with the benefit of being in a social club with like-minded people. Club members typically bring together a diverse collection of people and members take on various roles and responsibilities depending on their strengths and weakness.

Typical roles within an investment club include:

  • Chair - co-ordinates the other club members and ensures that each club member fulfils their commitments to the club
  • Treasurer - manages monthly member subscriptions, withdrawals, unit valuation, income/expenditure bookkeeping and investment club tax returns, such as Form 185(new) in the UK. It is not uncommon for the treasurer to also act as the club trader
  • Secretary - keeps a record of club minutes and general club administration
  • Research / Analyst - researches and analyses investment opportunities
  • Trader - ensures that the investment transactions that the investment club agree to are executed as planned

The Investment club members tend to meet regularly, typically on a monthly basis, to make an investment decision, discuss lessons learnt and review past performance. They are typically organised as a legal partnership, however, some investment club choose be self-directed, whereby the club members meet each month to discuss investment decisions and thereafter club members invest through their own brokerage accounts, rather than investing collectively. Typically investment clubs have a bank account in the name of their investment club, which requires multiple signatures, where all members pay monthly subscription into, typically via standing order.


Investment clubs have been in existence since the early 1900s, with one of the earliest examples of a modern investment club being the 'Mutual Investment Club of Detroit', which was founded in 1941. The Detroit investment club was established when a group of individuals wanted to invest in stocks, however, they did not have the money to do so individually, as trading costs were prohibitively expensive. As a result, the group decided to form an investment club so that they could pool together their money to improve their buying power and benefit from economies of scale through lower trading costs per person. The Detroit investment club still lives on and it is said that their investment portfolio is now worth many millions of dollars.

One of the earliest examples of a group of people who clubbed together to make investments was an art fund called, La Peau de l’Ours (The Skin of the Bear), which was set up in 1904 by a Parisian art lover called Andre Level. Level persuaded a dozen other art lovers to contribute 250 francs each year to buy modern paintings. In return, the investors got to hang the purchased artwork in their homes, for a ten year period, before the fund was cashed in by selling off the collection. Over the 10 years, Level collected work from artists such as Picasso, Matisse and Braque.

In 1914 when the First World War was about to break out, the collection was sold. One-fifth of the sale was donated to the original artists, and the remainder was divided between the investors, generating them a 4 fold return on their investment. You can only try to imagine what that investment fund would be worth today if they had gone for a buy and hold strategy!

Why Start an Investment Club?

  • Reduced Risk: Each club member pools together a relatively small amount of money each month, while benefiting from their collective buying power
  • Buying Power: Trading costs are typically fixed therefore investment clubs benefit from economies of scale through members pooling their money, which results in improved returns through proportionately lower trading costs
  • Education: For first-time investors, the market can be scary! Learn and grow together through education and the application of knowledge in a supportive environment
  • Collective decisions: Surveys show that collective investment decisions based on discussion and democratic choice are more likely to produce sustained profits (source NAIC). Club members come from all walks of life-giving access to an immense pool of knowledge
  • Social: It is fun and is an excellent way of meeting new people with a similar mindset while widening your social circle.

Why Invest in the Stock Market?

The main reason that unites all investment club members, is the desire to increase their wealth through investing in companies that will provide capital appreciation and potentially a source of income. Capital appreciation is achieved through increased share prices and income can be generated through dividend payments or investment strategies such as writing covered calls.

Despite significant stock market crashes over the centuries the stock markets have consistently outperformed inflation. Consider the Dow Jones index of 30 fundamentally sound blue chip companies that are listed on US markets. Based on statistics from the US Bureau of Labor Statistics 'Inflation Calculator', if you had simply invested money in an inflation-linked investment account between 1932 and 2007, you would have made a return of approximately 1,472%. Sounds great, however in reality all that you would have achieved is consistent buying power e.g. products, such as foodstuffs, that cost $1 in 1932 would cost $14.72 in 2007 if the price of those products increased in line with inflation for that period.

If however, you had invested in the companies, such as those listed in the Dow Jones index, you could have achieved returns of approximately 29,500% based on the increase in the value of the Dow Jones (30) Industrial Average for the same period between 1932 and 2007 i.e. for every dollar you invested in 1932, would now have now generated a return of approximately $295, as illustrated in the following Dow Jones (30) Industrial Average performance chart:

Dow Jones Historical Performance (small).png

Managing an Investment Club

Legal Structure Investment clubs are typically set up as a Partnership with a lesser number of clubs choosing to Incorporate themselves or become self-directed. The Investment Club Associations listed below typically provide a standard partnership agreement for investment clubs based on regional legislation.

Bank & Brokerage Accounts Historically Investment Clubs would open a bank account to receive monthly subscriptions from their club members, then transfer the funds to and from a brokerage account and manually apportion ownership. Using TimeToTrade, club members can now directly deposit funds into their TimeToTrade Club Trading account and have ownership automatically apportioned between club members, therefore removing the need of having to have a bank account.

Goals & Education When a club is formed it is considered good practice to establish financial goals, an investment strategy and decide on a method of developing an improved understanding of the stock market and investment products that are available.

Meeting Agenda Investment clubs typically hold monthly meetings that last between one and two hours. The following agenda, which is based on the TICN general meeting agenda, can be used to provide a structure for the investment club meetings:

  • Register attendance and call the meeting to order
    • This establishes that a quorum is present to conduct a business meeting.
  • Approve previous month's minutes
    • This allows everyone to approve that the last meeting was documented correctly. This isn't the time to debate whether a decision was appropriate; the minutes just report what happened.
  • Treasurer's report
    • Provide a report on investment transaction since the last meeting, stating the price and total amount.
    • State the portfolio value as of the valuation date, as well as available money in the bank and brokerage account.
    • Provide an update on member subscriptions and unit valuation
    • Distribute the monthly member valuation reports
    • State the club position with regards to its investment targets
  • Old business
    • This is the opportunity to discuss and resolve unfinished items.
  • Economic report & Group reports
    • On a monthly rotational basis, someone should be assigned to present a brief economic report covering any major economic news, including the short-term economic outlook.
    • Club members who carried out company research should provide a report on companies that meet the club's investment criterion
  • Portfolio update
    • Review of the stocks presently held by the club should take place, refreshing the club on the ranges (Buy, Hold, Sell) that were calculated for the stock, as well as the current price, current P/E ratio, and any other recent company news.
  • Discussion of buy/hold/sell decisions
    • New companies are presented and the current holdings are reviewed. The club should discuss any portfolio changes that the club is going to make.
    • It makes sense to discuss the stocks that will be sold first so that the club knows the amount available for purchasing stocks.
    • A public or secret ballot vote should be taken on any changes to the investment portfolio.
  • Education
    • All members must be dedicated to the club's long-term success, therefore need to address their personal growth in investment training.
  • Next month meeting
    • Confirm date, time, and place.
  • Adjourn


The majority of investment clubs, at least in the United States and the United Kingdom, implement a Unit Valuation System (UVS) to apportion ownership between Investment Club members. It enables club members to make flexible monthly subscriptions (contributions) and withdrawals through the process of purchasing and cancelling units. As a performance metric, the Unit Valuation System strength lies in the ability to apportion ownership at any point in time, as club members buy and sell units through making subscriptions and withdrawals.

An alternative method of managing club ownership is a system based on Equal Ownership. The primary benefit of using an Equal Ownership system, whereby each club member contributes an equal amount on a fixed date each month, is simplicity. The challenges with an Equal Share Ownership scheme, are what happens if a club member:

  • cannot make a monthly payment
  • makes a late payment
  • needs to withdraw money
  • wishes to increase or decrease their monthly contribution
  • is new and cannot afford to pay the historical monthly subscriptions that have been paid by legacy club members

The primary benefit of using a Unit Valuation System is the flexibility to make varying subscriptions at any point in time. The UVS approach addresses the shortcomings of the Equal Ownership system, however a potential consideration when adopting a UVS approach is voting rights, as members with larger holdings may require additional voting rights on investment decisions. Some clubs choose to base investing voting rights on unit ownership, however, for none investment decisions each club member has an equal vote.

Using TimeToTrade treasurers can manage either Equal Ownership or Unit Valuation Systems, and then generate the necessary reports for investment club meetings. Using TimeToTrade, units are automatically purchased when a club member deposits funds and sold when funds are withdrawn. Payments can be made online using cards with the ability to set up recurring subscription payments on specific days of the month. Doings so removes the need for the Treasurer to manually enter unit purchases and sales as it is fully automated on TimeToTrade.

UK Tax Returns

There are two possible ways in which the treasurer of a UK investment club can return details of any gains and income made by the club in a particular year:

  • in accordance with strict statutory requirements

After an investment club has been formed in the UK, you must inform your local HMRC tax office. The HMRC should invite all clubs to adopt the standard form of agreement when they become known to their local tax office and the HMRC should provide any assistance necessary in explaining the terms of the agreement. However, the HMRC cannot compel clubs to adopt the agreement and clubs can decide not to do so. If a club decides not to adopt the Standard Form of Agreement, it should be pointed out to the club's officers that:

  • each member will have to show on his or her annual tax return their share of any gains arising on the disposal of the club's investments, and of any income derived from the investments
  • the person(s) in whose name(s) the club's investments are held may be required to make a return under TMA70/S24
  • the treasurer or other officer who handles the club's money may be required to make a return under TMA70/S13

Investment Club Software

TimeToTrade is the UK's leading online Investment Club accounting and trading platform, which is also used by investment clubs all over the world. You can find out more on this link: Investment Club Software

Investment Club Associations

It has never been easier to execute your trading strategy. Our Trigger Trading Technology ® means you can now automatically execute your trades directly in the world’s global markets.

You need never miss a trading opportunity again!

Do you want to:

  • buy when your technical analysis chart conditions are met? Really buy, not just get an email or sms alert?
  • or sell when a support trend line is broken?
  • or back-test your strategy going back as far as 30 years?

TimeToTrade's Trigger Trading Technology™ is truly game changing. It gives you a trading advantage. The power to take your trading to a new level.

Open a FREE TimeToTrade account today to:

  • Trade UK, US and European Shares - apply now
  • Execute trades when your Price, Candlestick, Trend Line, Volume and Technical Analysis chart conditions are met using the Trigger Trading Technology® - learn more - help video
  • Email and SMS Trigger Trading™ Alerts - learn more
  • Trade Off The Chart - learn more
  • Back Test Trading Strategies with up to 30 years of historical data - learn more
  • Create Simulated Trading Accounts to test your Trigger Trading™ Strategies - learn more
  • Real time Forex, UK, European and US stock market data - learn more
  • 170+ Technical Analysis and Candlestick Pattern Indicators - learn more
  • All the tools you need to set up and run a successful investment club - learn more
  • Manage your Portfolio and calculate UK HMRC Capital Gains liabilities and SA 108 CGT Tax Returns - learn more
  • Create Trading Competitions for you and your friends - learn more
  • Apply for a trading account today to get the Live Account Features - apply now

Apply now to try our superb platform and get your trading advantage.

The information and data provided is for educational and informational purposes only. Interpretation and use of the information and data provided is at the user's own risk. All information and data on this website is obtained from sources believed to be accurate and reliable. However, errors or omissions are possible due to human and/or mechanical error. All information and data is provided "as is" without warranty of any kind. We make no representations as to the accuracy, completeness, or timeliness of the information and data on this site and we reserve the right, in its sole discretion and without any obligation, to change, make improvements to, or correct any errors or omissions in any portion of the services at any times. Past performance is not a guarantee of future results. Trading carries a high level of risk to your capital and can result in losses that exceed your deposits. It may not be suitable for everyone so please ensure you fully understand the risks involved.

All services are provided by TigerWit Limited. TimeToTrade is a trading name of TigerWit Limited (a company registered in England and Wales under number 9479466). Our Registered address is TigerWit, 7th Floor, Augustine House, 6A Austin Friars, London, EC2N 2HA, England. TigerWit Limited is authorised and regulated by the Financial Conduct Authority number 679941.

The trading services offered by TigerWit Limited are not available to residents of the United States and are not intended for the use of any person in any country where such services would be contrary to local laws or regulations. Subscriptions to TimeToTrade products are available if you are not eligible for trading services.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading spread bets with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. All clients should be aware that trading involves risk.

TimeToTrade is a Sensatus product.

Retrieved from "?title=Investment_Club&oldid=37740"