Crow River Investment Club
New Member Information
Dear Prospective Member:
Thank you for your interest in the Crow River Investment Club. This document should provide much of the information you will need to determine whether or not you are interested in joining our club.
The purpose of our club is to pool our time and talents to educate ourselves about long-term investing in the stock market. Our philosophy is to study and purchase only good quality stocks that have the potential to double the value of our portfolio every 5 years.
Our club is no longer affiliated with the National Association of Investors Corp. (NAIC), now known as BetterInvesting. However, we do subscribe to their founderís original philosophy of ďgrowth at a reasonable priceĒ investing. In other words, Get Rich Slowly! We share their belief in the following:
Reinvest all dividends;
Buy good quality stocks; and
Why an Investment Club?
Over seventy years of research proves it! Investing in the stock market provides a higher return, over the long-term, than any other investment vehicle. And, the magic of compounding allows us to grow those investments with very little effort.
Some folks would prefer to spend their retirement dollars on mutual funds and leave their portfolio decisions to the fund manager. Those of us who prefer a more hands-on approach are the ones who join investment clubs.
The club environment can be great fun if you have a yen for learning in a group setting. By pooling our funds, the club is able to diversify its stock holdings more easily than an individual investing on his or her own. And by pooling our talents, the task of researching companies can be split up among club partners, reducing the individual workloads for the benefit of all.
While we enjoy ourselves, we make sure to conduct our affairs in a friendly, mutually respectful, and business-like manner. Partners contribute a small amount every month, and we operate on a one-partner, one-vote agenda. Therefore, everyone has an equal say in the club's operations.
About Our Meetings:
Our meetings are held on the 2nd Tuesday of each month from 6:30 p.m. to 8:30 p.m. in the home of one of our partners in St. Michael. This is subject to change from time to time. We try to adhere to these meeting times, and seldom do we start late or run over.
At each meeting, partners make their monthly contribution to the Treasurer who deposits the money in the club's bank account. The minimum monthly payment is $30, but you are free to invest more. Each contribution buys shares (or units) in the club, much like a mutual fund works. The value of your club capital account is based upon the number of shares you own and the current per-share value.
After we finish our business segment, we assess our portfolio, share information weíve gathered in between the meetings, listen to stock reports, engage in rousing discussions, and learn new things during our education program. Most meetings leave us excited and eager for more!
What You Need To Know About Joining Our Club:
First and foremost, you should know that an above average desire to learn far outweighs any experience in investing. So if you are new to all this, donít be afraid to join. It takes investors of all levels, working together, to create the best learning environment. Peter Lynch once said that an average individual, using 3% of his brain, could outperform any professional analyst! While this may be an exaggeration, we agree that an average person, if motivated, can do an excellent job of building wealth on his or her own.
If you enjoy reading and playing with numbers (the simple stuff-- addition, subtraction, multiplication and division), and if you enjoy working in a team-like environment, then you just might enjoy the club experience.
Our club does much of its research, accounting and communicating online. Each member must be equipped with an IBM-compatible computer, capable of supporting our software. These requirements can be found at http://www.iclub.com/products/tk5.asp. Internet access and an email account capable of sending and receiving attachments are also required. Our club has its own website, chat room and message board at www.bivio.com/crowriver .
We know this must sound positively over-whelming! But we can assure you, itís very systematic and easy to learn. And to ensure that you start off on the right foot, your initial cost of joining the club includes the purchase of an NAIC stock analysis software program called Toolkit 5. Itís a wonderful program that takes most the mystery out of analyzing stocks. With this program we can learn about a companyís history and the quality of its management. With a few judgments from us, itíll tell us whether a company is over or under priced, and at what price we should consider buying. Thereís more! We can follow a stock in the portfolio management section, and it will tell us when it hits our buy target! The software is a one-time purchase, with occasion updatesómost of which are free. We believe itís a necessary and worthwhile expense (currently $219). StockCentral.com has data files on thousands of public companies that will automatically download into this software. The data files are extremely convenient, but they are not required. Most of our members pay $39 per year to access them.
Finally, we strongly suggest several books that will help you understand our philosophy and investing style. One is Take Stock by Ellis Traub (currently $10 on Amazon.com). It may be the most helpful tool we can offer. Ellis is the developer of the Toolkit software, and heís a regular participant on investing message boards. His style and ability to convey in simple terms the complexity of investing in the stock market is second to none! And this book will make learning the stock analysis software a pleasurable experience. Other book recommendations can be found on our website under Newcomers.
The club functions as a group and our success or failure will hinge, in large part, on the effort we put forth. While we want the club activities to be enjoyable, we also expect a willingness to participate from our partners. The club expects that each partner will attend the vast majority of meetings and make monthly contributions on time. You should also be prepared to commit at least 4 hours per month to the club and its investments. This is only an approximation, as the time required will vary from month to month.
To ensure your success, you will be given an orientation meeting prior to induction into the club. Here, you will get a tour of our online tools, our software program, our accounting program and samples of our computer-generated stock studies and other reports. We will explain how the meetings and committees work, and answer any questions you may have. We are also developing a newcomerís corner on our website which will be packed with articles and websites to help you better understand investing, in general, and investment clubs, in particular.
We know that committing to something new and unknown can be rather daunting for some. Thatís why we want you to understand that, while we are looking to add new partners with a long-term horizon, we are not asking for a life-long commitment. Any club partner is free to depart at anytime without penalty.
If you are not completely comfortable with the structure, goals or requirements of our club, then you should probably not apply for membership. We don't want anyone to commit if they do not feel completely compatible.
The Club Application Process:
1. All new applicants will be invited to a meeting. No participation is required. Just sit back and enjoy the process! If, after the meeting, you are interested in joining the club, you will be asked to review our Partnership Agreement and other club documents on our website. You will also be asked to complete the online application and bring it to the next meeting.
2. You may attend as many as 4 meetings in order to decide whether or not you feel the club will fit your needs, but all prospective members must attend at least 2 meetings before they can be considered for partnership. After the second meeting, if you are still interested in joining, you may contact the president to schedule the pre-orientation meeting.
3. Your application will be circulated to the partners, and time will be allotted at the third monthly meeting to answer any questions you or the partners may have.
4. Within a few days of this meeting, the partners will take a vote by email, the results of which will be shared with you and confirmed at the top of the following meeting. The vote to induct a new partner will be made by majority rule. If the vote is positive, you will become a partner at the next regularly scheduled meeting. Your initial fees will be due at that time.
5. After you have been inducted into the club, you will receive other club tools, forms, log-on instructions, etc. And you will be asked to set aside some time for hands-on, individualized instruction to bring you up to speed. You will be responsible for obtaining the required software by the time you attend your first official meeting as a partner.
The education that comes from an investment club will stay with you for a lifetime. This education is timeless and important. We all need to be prepared for the future, whether we learn it on our own, or as a team. The only difference is, learning in a group setting is more fun! We can assure you that the entrance fees and ongoing club dues will provide you with a very enjoyable and inexpensive education. If you have any questions, please contact us. Good Luck!
Costs to become a Partner:
Non-refundable club entry fee: $ 25.00
Initial funding for your personal capital account: $ 50.00
Toolkit Software: $224.00 ($219.00 + $5.00 Shipping)
Total Initial Fees: $299.00*
$30/month club dues
StockCentral membership with data files $39.00/year (optional)
* (Average Investment Club initial fees are $300-$1,000)