Successful clubs can have as few as three or four members, but they seem to do best with 12 participants. This is because investment capital is accumulated more quickly and the costs of the transactions are cheaper with larger trades.

When you start recruiting members, make sure that they are fully committed to being a part of the club. It is also important to ensure that the members share similar philosophies and goals. It is no good having one half of the club wanting to invest in IT high flyers and the others in conservative blue chips. If you agree upon a certain methodology, your club will probably do better.

When you have enough members, call a meeting and discuss how the club is going to work. It is recommended that members should be required to pay monthly dues of, say, R40 a month and investment capital of around R100 to R500 per month.

Educate yourself

The dues will fund the purchase of investment tools such as books, courses and software programmes.

The most successful clubs are those with 'Education' as their primary goal.

It might take six months to a year before you feel ready to invest and have enough funds to open an account. This build up period should be used to educate yourselves as much as possible.

When you have your first meeting, it is important to have a definite idea of what you want to achieve. A clearly set out agenda will help to keep you on track. Use this agenda as a base and adjust it to your needs.

The Meeting Agenda

• Register members present: This will give you an indication of who is a regular participant and prevent disputes if a decision was made in the absence of a member.

• Review the previous month’s minutes: This allows everyone to make sure that decisions made at the last meeting were carried out. Keep this short and to the point otherwise you will end up discussing old news.

• Treasurer’s report: Use this time to collect the current month’s fees and investment monies. The treasurer should report on and confirm any buys or sells that have occurred since the last meeting. They should also state the portfolio value as of the valuation date and inform the members what money is in the bank or brokerage account.

• Economic report: A brief economic report is given covering any major economic news, including the short-term economic outlook. Much of this information can be obtained from sources such as Financial Mail and Business Day.

• New business: This is the opportunity to discuss issues related to club operations and procedures.

• Portfolio evaluation: Discuss current status of the portfolio and look at possible new investments.

• Buy/sell decisions: Once the new companies are presented and the current stocks are reviewed, the club should discuss what actions they are going to take.

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