That means the typical investment club serves as a supplement to retirement savings, rather than a foundation.
The traditional investment club model involved trading in individual company stocks, but now some clubs focus on mutual funds.
Ernie Felzani, president of BetterInvesting's Massachusetts chapter, said membership in his chapter has fallen since early last year, but that in November and December there were signs of a rebound. He thinks the current market conditions will lead to a gradual increase as small investors look for help.
At a meeting of Massachusetts club officers Saturday, Felzani said many in attendance indicated they are in a buying mood. "The educated investor right now is buying," he said.
Sterling said that, at one point, her club saw its portfolio rise by 46 percent. Then it was down more than 20 percent and club members grew nervous.
"We were all kind of scared with everything going on in the market and we just froze," she explained. But the anxiety didn't last long as club members comforted each other and, as a result, avoided making panicked decisions.
"If it was just one of us, we'd probably fester in our fear or do something stupid, like bolt," she said.
Instead, the group decided "you really have to think about it like everything in the stock market is on sale. So, we decided to go ahead and actually buy and not hold back."
Kathy Hankard, a financial planner in Verona, Wis., belonged to an investment club when she lived in Colorado in the 1990s. She called it a great educational experience that influenced the philosophies that she now adheres to as a financial planner.
For instance, the experience of learning how much work is required to research individual company stocks persuaded her to favor index fund investing over individual stocks.
Should a client ever express an interest in joining an investment club, Hankard said she would likely encourage it after the client asks about the club's mission and philosophy.
"It's so much about the people and chemistry," she said.
You can learn more about investment clubs by visiting BetterInvesting.org and the Motley Fool Web site, which has a section on the subject. Also, the Securities and Exchange Commission provides information on investment clubs on its Web site, www.sec.gov.
ABC News' Alice Gomstyn contributed to this column.
This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
David McPherson is founder and principal of Four Ponds Financial Planning in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at email@example.com.