Know what you own: Look at your membership and figure out where your collective experiences and expertise might reside. For example, does your career provide you with some insights into certain industries? Survey your members to determine which industries you understand and can make informed decisions about.
Keep in mind that your investment club participation should not be your only investment. You should also be investing a retirement plan as well as have saved a rainy day fund in case of emergencies.
Every club must have an employer identification number (EIN) to use when filing its tax return -- it's like a social security number for your club. To apply for an EIN, you need to complete form SS-4 which can be obtained online at www.irs.com or by calling 1-800-tax-form (1-800-829-3676).
There are many other tax nuances to take into consideration, so you should consult with a tax advisor.
It's important to keep in mind that investing is a long-term pursuit. It's impossible to time the market and to pick winners all the time, so make sure your club agrees to stay the course and weather the market's ups and downs. You should also view the club as not simply way to make money, but also to increase your own financial smarts, and use your experience to teach your children about saving and investing.
You should consider enrolling in Better Investing. Better Investing provides administrative services and excellent educational material for investors as well as a low-cost stock purchase plan to further facilitate the purchase of common stock.