Investment Club Update – 2013 Returns

Early in 2013 I, along with 8 other buddies, created an Investment Club.  The idea was simple we would each put $500 to start it up and then an ongoing $100/month contribution.  As with most things life it isn’t the idea that is difficult, it is the execution.  One month in, I had very little hope for the survival of the investment club.  Shockingly, the investment club itself turned around and by 7 months in we really hit our stride.

How the Investment Club Did in 2013

Mainly because I knew no one else would do it I took it upon myself to calculate our returns.  Each member put in their initial $500 as well as their subsequent $900 monthly contributions.  It cost us $1,642 to get the LLC up and running (now that I have done these for clients this number was a rip off, but too late now).  We also had to subtract $400 which was January’s contribution for some leaving us with a year end out of:

Investment Club Results

Investment Clubs 2013 Actual Returns:

  • Investment Gain for 2013 – 31.47%
  • Total Gain (with non-recurring start up costs) – 13.78%
  • S&P From 2/19/2013 to 12/31/2013 – 21.63% (when money was deposited)
  • S&P From 2/19/2013 to 12/31/2013 – 18.24%% (our first trade)
  • We only closed out on 3 stocks (realizing the gains) – 119.57% ($367.49), 106.17% ($213.88) and 20.16% ($51.52)
  • Received $39.53 in dividends, but these weren’t reinvested in 2013 (will be in 2014 and beyond).

The Future of the Investment Club

Last night we had a 3 hour online meeting using a simple chat service.  In it we confirmed/changed some of our processes, discussed tax ramifications and decided what to do with each of our current holdings.  The level of participation from nearly every member was a welcomed surprise.  Besides my efforts to move along the conversation not one person dominated the conversation or votes which is just fantastic.

Unlike at the beginning I am excited to see how well the investment club does in 2014!

 

8 Responses to Investment Club Update – 2013 Returns

    • Thanks Larry! I didn’t think this post was going to be a good one when I wrote that first update but I have been pleasantly surprised with most members.

  1. I’m glad to hear things have continued to turn out well for your investment club. I remember last spring when things seemed a bit dicey and tough to manage. Once people have bought into the concept and understand the expectations, things tend to roll along much more smoothly. In the beginning, there are some people who adjust to having added responsibility at a faster rate than others, creating that awkward period where some seem committed and others not as much.

    Best of luck with the returns in 2014!

    • I remember reading your comment last spring and being bummed out that these guys couldn’t step it up! They are all smart individuals and people I call my friends. 2 out of the 9 are more hands off than I would like but what are you going to do?

  2. Hi Evan,

    Great news on your club! It’s wonderful when everyone is engaged.

    If you’d like a simple way to do your accounting and prepare your taxes, you might consider checking out our website. We offer a cost effective web based accounting service for investment clubs. You’d be able to share your records easily with your members and compare your clubs performance against just about any benchmark you’d like automatically.

    Our customers love us:

    https://www.bivio.com/bp/Testimonials

    We’d love to have your club join our community. Feel free to contact me personally if you’d like any more information.

    Laurie Frederiksen
    http://www.bivio.com

  3. This is great – I’ve thought of trying to start up something similar and have always been deterred by the tax implications and the administrative hassle that I imagine an investment club would be. How have you decided to handle those aspects?

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