what is an investment club 
an investment club refers to a group of people who pool their money to make investments usually investment clubs are organized as partnerships after the members study different investments the group decides to buy or sell based on a majority vote of the members club meetings may be educational and each member may actively participate in investment decisions understanding investment clubsinvestment clubs are usually a group of amateur investors who learn about investing by pooling their money and investing it is a group in the united states there are two formal definitions of investment clubs that are complimentary the securities and exchange commission sec has defined investment clubs as the internal revenue service irs has also defined investment clubs the irs goes on to say that investment clubs tend to operate informally with dues paid regularly such as monthly some clubs employ committees that recommend investments while others involve each member in the process clubs subject any actions to a vote by membership for more information interested parties can refer to the chapter in irs publication 550 on investment clubs 2advantages of investment clubsthe advantages to investment clubs are that they are the easiest and most economical entities to form operate and maintain pooling money to do larger market transactions means that the members all enjoy lower transaction fees the investment club s income and losses are passed through to its partners and are reported on their individual tax returns investment clubs are above all else a terrific way to learn make valuable contacts and meet people interested in the same topics some clubs have made significant returns for their members but even the money losing investment clubs provide important lessons that members will take with them into the future special considerations