Ever heard of an investment club? If you’re not in the know, an investment club is simply a modestly sized group of private investors, and it’s generally made up of a set of friends, church members, a few family members, or neighbors. The group meets at regular intervals for one reason: They pool their money and invest in a portfolio for the “club”.
Over the last few years, the number of small-time investment clubs has doubled in size in the United States. This statistic was furnished by the National Association of Investors Corporation, which is a nonprofit that provides tools, resources, and encouragement for investment clubs from coast to coast.
With the rise of economic instability, however, investment clubs are risky business. That’s why choosing the right investment club strategies for 2012 is a crucial move to maximize earnings that you’ll receive if you decide to join or start a club of your own.
Real Estate Investing
Investment clubs offer the ability for individuals to purchase real estate for the purpose of renting, selling for a profit, or rehabilitating. They can buy in when they otherwise could not due to credit or income limitations. A group of people makes this process affordable.
Why is investing in real estate such a shrewd move in 2012? Simply because the housing market has taken a massive hit, and interest rates are at an all-time low. An added bonus is that housing prices are bottom-barrel, too. Investment clubs allow individuals to take advantage of an unparalleled advantageous buyer’s market and make the housing lull in the U.S. work for them.
Trading in the Forex Market is incredibly hot right now. Even the smallest interest in investing can tell you that if you run a quick Internet search on the topic.
Forex trading is essentially the act of exchanging foreign currencies online. Investors buy and sell currencies for a potential profit. Fun fact: Currently, Forex trading accounts for nearly $3 Trillion worth of investing around the world on a daily basis. The potential for profits is huge – but so is the potential for losses. If you employ this investment club strategy, make sure that you have someone in the club that knows the ins and outs of Forex trading so your club will stand a better chance of scoring positive results.
Stocks and Bonds
If you want to go a more traditional route, join an investment club that focuses on stocks and bonds. In 2012, the best investment club strategy for stocks is to stick with the biggest brands – think Wal-Mart, Google, and other global companies that are “too big to fail”. During a massive global recession, it’s best to play it safe by sticking to these big companies because they’ll continue to see positive growth even in the worst of times. Although the returns will not be as high as they would be for more risky investments, you’ll enjoy a solid, stable increase in your money and it will continue for the long haul. As conditions improve, diversifying the investment club portfolio is a good move to make as well.