<p>Our son is looking to start an Investment Club at his HS.</p>
<p>He is a Senior IB student at a public urban school and is looking to learn more about business while showing initiative and leadership by founding this club. Being an IB student he has not taken any business class, until this year, he is taking Microeconomics at the local University. </p>
<p>As a parent, (with no investment experience) if my S were to come home and say he was joining a Investment club I would be worried about scams. How does a club like this work? Can someone give some advise on how this type of club is started and ran? My S is searching the internet for clues, but I have seen a few students stats posted on CC who have done this so I thought I would ask</p>
<p>Before I invested any brainpower in this, I would be certain that it is an approved extracurricular activity within the school. Our public school board has nixed certain student-initiated clubs.</p>
<p>I think it is a great idea! I haven't even looked, but I am sure there is some kind of organization or association of investment clubs and they probably have a website. My wife belongs to an investment club. For students you may be able to start a club with a very small investment, even $10, but it might work better with $100 each. How do you avoid a scam? Account for all the money and place it with a well known broker. Supervize closely! </p>
<p>Rough outline? (Probably some legal documents to draw up, but...) Maybe decide up front that investments will be in common stock. 20 students contribute $100 each, so club treasurer opens an account at, say, Charles Schwab and deposits $2000. Students do some reading on efficient market theories and research sectors and companies and make proposals on which companies to invest in. Members then vote on which investments to make. Club officer calls the broker or does the trades online. (Important to restrict access to the account!) Every member can go to Yahoo or some other similar website and enter the portfolio online and track value in real time. </p>
<p>Club can be disbanded, cashed out, at the end of the year, or a student can sell his share at market value. </p>
<p>An investment club is a great learning vehicle. Nothing keeps your attention focused like playing with real money! :)</p>
<p>The legal hurdles (you may have to actually form a partnership) may be insurmountable. If so, I suggest your S form a club where they meet, discuss, research and create a shadow portfolio. (make believe pretend money). You may or may not want to invest your personal funds according to the club's recommendations to show them actual results.</p>
<p>An easy way to start out a high school investment club is to start out with an investing simulation. There are tons online. Some have a fee to enter (only about $10) and are competitions between high school students around the country, while some are a free version of basically the same thing0. My club did a few of these last year and they worked out very well.</p>
<p>This type of simulation starts by giving each student or team a fictional $100,000. Students can use this money to invest in whatever stocks they want. These are real stocks with the real prices; stock activity mirrors the activity of what the real stock market is doing.</p>
<p>Outside of investment simulations, we researched penny stocks. These stocks are typically not very exciting to invest in, as we found out last year, but are a cheap way to get into the real market. Also, as a service component of the club, we went to neighboring elementary schools and taught kids a little about economics. This year we are planning to go to nearby high schools that do not have business or economics classes to teach some econ basics. We are also trying to get speakers to come talk to the club about future opportunities in the field.</p>
<p>I just started my high school's investment club last year, so it's been a bit slow getting started, but I hope this helps!</p>