What You Need to Know About Investment Groups

Investing your money in a diverse portfolio of projects is one of the best ways to save for retirement, build up capital and support the economy. Many people will join investment groups or clubs to research and discuss projects worth funding. Before you make or join one of these clubs, knowing some of the benefits, regulations and structures related to the practice is vital.

Benefits

In addition to the benefits you get from making wise investments, joining or creating a club gives you the benefits of lower risk, more capital, an extended network, and increased portfolio diversification. Investors like Patrik Edsparr will tell you that you can benefit from investing as a group because you foster teamwork and build relationships.

Regulations

The US Securities and Exchange Commission and states do not usually regulate investment groups, but they will if the group meets specific criteria. Namely, suppose the club meets the legal definitions of an investment company. In that case, the states or the SEC may require the entity to register with them as an investment company and be subject to regulations. Individuals, like investment management CEO Patrik Edsparr, may meet the definition of an investment advisor and may have to register as such.

Structure Types

The two main structure types of investment clubs are divided by how the actual investments are made. You can pool your money to make one group investment or pool research while investing as individuals. The second type is sometimes called a self-directed investment group and gives you the benefit of joint research while still controlling your investments.

Investing your money wisely can be tricky and involve a lot of research. Knowing some of the benefits, regulations and structures of investment groups can help you make the best decision with your money. When you create or join an investment club, you can research as a group and lower your risks while enjoying various experiences and investment types.