prashant_nz;12660Hello all,
I would appreciate if someone on the forum can advise me on the following.
Yesterday my friend took me to a meeting and there they talked about forming a shareclub of 25 memebers with everyone putting 2000$ as a starting investment and then investing 200$ monthly into a shareclub bank account with unit value of 200$ intitally. so every one starts off with 10 units and then buy 2 units evey month.
That guy already signed up 10 ppl in the meeting yesterday but i wanted to get advise before i decide to join that scheme.
they are talking abt forming a constitution and all so it seems legal.
Then every month all the members will hold a meeting and decide where to invest that collected money in shares using a voting process. The minimum lock in period of this scheme is 2 yrs.
The fees are
250$ pa to the Admin of shareclub
.25% pa of the portfolio value to Trustees
They also have arranged an independent Financial planner to give us suggestions on what to buy.
His fees kicks in at .85% of porfolio value after the value goes over 100000$.
Basically the guy told me that this is a long term investment fior retirement planning.
Now can you guys give me advise as to go for it or not as i am totally novice to finance and share trading.
Is this a good scheme to dabble in the share market?
I am based in NZ not in US.
Desi i would really appreciate if you can pitch in with your pearls of wisdom. Thanks
Thanks ALL
PM[/quote]
Not Desi but will put in my 2c
Looks like the plan is to start a mini mutual fund company. I guess most of you would be novices so I dont see the point of taking a majority vote for investments. Looks very shady to me.
Not sure what other options you have in NZ. If I were you I will try to find out what other options I have as far as Mutual funds are concerned. I will pick a reputed mutual fund company and look for index funds and run as far away as possible from the meetings.
Shareclub membership advise
Shareclub membership advise
Shareclub membership advise
This is what is called an investment club.
http://www.investmentclubhelp.com/
http://www.ag.ndsu.edu/pubs/yf/fammgmt/fs583w.htm
This is when one plumber and one brick layer decide they can build a house and recruit ordinary people who have no knowledge. Some investment clubs recruit services of Financial Planners. Others pick up tips and farm out to members to do "research" on stocks etc.
If you google "Investment Club" you will find tons of information as to how they operate.
In USA, these are treated as partnerships and have to issue K1 forms to all members even if the assets are say only $10000 and there are 20 members.
These became very popular in USA when one ladies investment club made a ton of money but those were the go go heydays of the nineties bull run. This was the Beardstown Ladies investment club and I believe that there were books written on it.
Investment clubs numbers skyrocketed but my guess is that a large number of them folded shop by 2003 just when the rally started :emteeth: . Novices (this is a guess on my part and I have no data to back that up - just a guess).
If I were you, I would stay away and focus on putting the money in low cost index funds that invest across the globe. I would recommend that you read this Financial Planning for R2I by Vinod. and look for equivalent funds in NZ. The best thing you can do is start early, DCA regularly, remain disciplined and invest for the long haul per an AAP.
What I have said above is just one person's suggestions. There are a lot of knowledgeable people in the forum. In fact we have one self made millionaire member who had been talking about some finance stuff. You may want to check with him and others to see what they can add.
http://www.investmentclubhelp.com/
http://www.ag.ndsu.edu/pubs/yf/fammgmt/fs583w.htm
This is when one plumber and one brick layer decide they can build a house and recruit ordinary people who have no knowledge. Some investment clubs recruit services of Financial Planners. Others pick up tips and farm out to members to do "research" on stocks etc.
If you google "Investment Club" you will find tons of information as to how they operate.
In USA, these are treated as partnerships and have to issue K1 forms to all members even if the assets are say only $10000 and there are 20 members.
These became very popular in USA when one ladies investment club made a ton of money but those were the go go heydays of the nineties bull run. This was the Beardstown Ladies investment club and I believe that there were books written on it.
Investment clubs numbers skyrocketed but my guess is that a large number of them folded shop by 2003 just when the rally started :emteeth: . Novices (this is a guess on my part and I have no data to back that up - just a guess).
If I were you, I would stay away and focus on putting the money in low cost index funds that invest across the globe. I would recommend that you read this Financial Planning for R2I by Vinod. and look for equivalent funds in NZ. The best thing you can do is start early, DCA regularly, remain disciplined and invest for the long haul per an AAP.
What I have said above is just one person's suggestions. There are a lot of knowledgeable people in the forum. In fact we have one self made millionaire member who had been talking about some finance stuff. You may want to check with him and others to see what they can add.
Shareclub membership advise
my understanding of mutual fund is the leader gets bribe from the stock
broker then he holds majority of that stiock, then you are done with
your money, be very careful
broker then he holds majority of that stiock, then you are done with
your money, be very careful
Shareclub membership advise
YCl,
I am not sure what you are saying - nothing of what you say makes sense to me and seems very misleading.
Stock broker sells thousands of stocks. And by Mutual fund what do you mean? A traditional Mutual Fund - a la Vanguard or the investment club.
Please explain your statement. Your understanding may be grossly erroneous.
I am not sure what you are saying - nothing of what you say makes sense to me and seems very misleading.
Stock broker sells thousands of stocks. And by Mutual fund what do you mean? A traditional Mutual Fund - a la Vanguard or the investment club.
Please explain your statement. Your understanding may be grossly erroneous.
Shareclub membership advise
desi,
be it mutual fund or not, here is the scandal that happened few years ago,
the manager of mutual fund has friends in stock brokerage firms or company ceo.
and obviously the fund has more percentage in those stocks.
it does not take a rocket scientist to figure how the scandal works.:emwink:
be it mutual fund or not, here is the scandal that happened few years ago,
the manager of mutual fund has friends in stock brokerage firms or company ceo.
and obviously the fund has more percentage in those stocks.
it does not take a rocket scientist to figure how the scandal works.:emwink:
Shareclub membership advise
I am well aware of the mutual fund scandals that were prosecuted by Eliot Spitzer's office.
However what you are talking about has in my opinion: 1. nothing to do with the OP and 2) those MF scandals was something entirely different than what you are talking about ( if you are interested, you can read how they helped various preferred clients and hedge funds illegally by doing a Google search.).
Quote from post #4.
[quote]gets bribe from the stock
broker then he holds majority of that stiock[/quote]
Quote from post #6.
[quote]the manager of mutual fund has friends in stock brokerage firms or company ceo.
and obviously the fund has more percentage in those stocks.
[/quote]
Which stock is this? Brokerage company is a broker that brokerages for you on the exchange.
No, I don't get / understand what you are saying. In my opinion, that scandal is totally irrelevant here and has nothing to do with the broker or "that / those stock", whatever that is. That scandal was of allowing trades and cancelling trades post market close executed based on news and or foreign market closes due to time zone differences thus getting benefit of information ahead of general public. Or another possiblity is that I am ignorant of some scandal that you are referring to and that I cannot seem to comprehend its mechanics.
Thanks for your explanation though.
However what you are talking about has in my opinion: 1. nothing to do with the OP and 2) those MF scandals was something entirely different than what you are talking about ( if you are interested, you can read how they helped various preferred clients and hedge funds illegally by doing a Google search.).
Quote from post #4.
[quote]gets bribe from the stock
broker then he holds majority of that stiock[/quote]
Quote from post #6.
[quote]the manager of mutual fund has friends in stock brokerage firms or company ceo.
and obviously the fund has more percentage in those stocks.
[/quote]
Which stock is this? Brokerage company is a broker that brokerages for you on the exchange.
No, I don't get / understand what you are saying. In my opinion, that scandal is totally irrelevant here and has nothing to do with the broker or "that / those stock", whatever that is. That scandal was of allowing trades and cancelling trades post market close executed based on news and or foreign market closes due to time zone differences thus getting benefit of information ahead of general public. Or another possiblity is that I am ignorant of some scandal that you are referring to and that I cannot seem to comprehend its mechanics.
Thanks for your explanation though.