Now you know how to set up a watch and a consolidated portfolio (previous articles). And, now you're convinced that you can invest as little as $25 per month and still call yourself an investor. So what's next, other than actually taking that first step and committing that money to an investment strategy? I would say that the next step is to get connected.

No, I don't mean connectivity via your Internet. You already have that, or you wouldn't be reading this article. I mean making connections through a group of like-minded people who are willing to invest at least $25 per month into a stock market plan. Before you object to this mission, allow me explain why an investment club might be a good thing.

Gfk Roper Consulting published a report in January based on 2006 and 2007 telephone interviews with adults. They discovered that Americans' confidence in their investment abilities has dropped over the past two years. A full 52 percent of those polled in 2006 ranked themselves as beginner investors. And, the percentage of people who take sole responsibility for investing in their households has declined since 2003.

But, the number of individuals who now share investment decisions with someone else in the household has increased steadily from 2003 to 2006. That number of shared investment strategies has increased substantially, from 38 percent in 2003 to 46 percent in 2006. This collaborative attitude could be a result of how investors feel about their expertise, because a person who lacks confidence about an investment strategy probably would like some advice - or at least a pair of ears to hear out an idea.

No matter how this collaboration comes about - the point is to seek out a group of people who want to accomplish a similar objective. That goal would be to save money, no matter whether that savings is earmarked for college education, retirement, or for a vacation of a lifetime. This group could be young, old, or a mix of ages. And, an investment club could limit membership to males or females or it could be co-ed.

Now that the "who" is out of the way, you might wonder "what" an investment club is all about. The SEC states:

"An investment club is a group of people who pool their money to make investments. Usually, investment clubs are organized as partnerships and, after the members study different investments, the group decides to buy or sell based on a majority vote of the members. Club meetings may be educational and each member may actively participate in investment decisions."

Don't let that word, "partnership" scare you. The only time you'd need to deal with the SEC as an investment club is if your club contained more than 100 members and if your club issued securities. Keep that information in your back pocket as you search for a local club or if you decide to start one up on your own.

"Oh sure," you say. "I only have sixteen kids, two jobs, and a house that's falling down around my ears. I don't have time for a club, let alone create a club."

Although I commiserate with you on one level, on another level I wonder where you hid your logic. Think about this list, compiled by the National Association of Investors Corp. (NAIC - otherwise known as the "Better Investing" community):

1. Participation in an investment club usually requires regular investments, no matter the market conditions. This sure sounds like dollar-cost-averaging, doesn't it?
2. Club members are urged to reinvest dividends and capital gains. Wow - what a concept! This sounds like advice offered by any long-term buy-and-hold investment strategy.
3. Buy stock in companies that are growing faster than most of their peers. If you don't have time to find these companies because of your time-consuming activities, don't you think that this goal might be better met in a group environment?
4. Diversify investments, not putting all the communal eggs into one basket. Oh yum - diversification is an investment strategy that's better than chocolate.

Before I go further I'll define something for you here - most investment clubs want to pool money to purchase a basketful of the same stocks. Yes, you can do this through BUYandHOLD if your group picks an administrator who conducts the purchases and sales. The rest of the members can keep an eye on the group portfolio by using BUYandHOLD's View Only Access.

Back to a reason why you should join or start an investment club (from the Motley Fool):

• You're new to investing and are looking for a good way to get your feet wet.
• You'd feel more comfortable learning about investing with others than on your own.
• You have roughly $20 to $50 that you can invest through the club each month.
• You've been putting off learning about investing and sense that having a responsibility to the group would provide some much-needed discipline.
• You think it would be fun to have a group of people with whom to share company research and to discuss investing topics.
• Friends have gently suggested that it would be good for you to get out of the house once in a while.

See? I'm not the only one who thinks that you need a break from the kids and that leaky faucet. Give yourself an hour or so per month to meet other people who want to dream (like you) and who want to make those dreams a reality (like you). It sure beats sitting at home in front of the TV watching reruns.

Until Next Week,
Linda Goin