Join the Club

Call me old-fashioned. In the age of YouTube, I still prefer to read books, and I still get more enjoyment out of going to a play than I do out of seeing a movie. And despite the widespread availability of self-help books, CNBC, discount brokers and The Motley Fool, I still believe the most enduring investment lessons come from doing--and joining an investment club is one particularly good way to learn.

Investment clubs certainly aren't a panacea, and they rarely work as get-rich-quick vehicles. Essentially, you're making your own little mutual fund. Since we know most funds fail to beat the market averages, why should you think you can do better? The answer is that it's all right if you don't. You learn by debating investments and picking stocks with friends, plus you get the forced discipline of writing a check to the club each month (the national average is about $80 per person). If you learn a lot, have a good time and do merely OK with the club, you're ahead of most people. Plus, there's always the chance that you'll do far better than OK.

You can join an existing club, though most aren't looking for new additions. Most likely, you'll have to start one with friends or colleagues. Pick people you both like and trust (ideally with a range of skills and experience), settle on an investment philosophy, then get together once a month to swap ideas and decide where you'd like to put the group's money. For help with logistics, visit www.betterinvesting.org. The site is run by a nonprofit group that for years was known as the National Association of Investment Clubs, and it's still the best place to go for investment club information. The group's Stock Selection Guide has long been a mainstay of clubs across the country.

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Before making the leap, be sure you really want to learn about the investment process, you have the time to spare, and you're committed to being with the group long term. The same goes for others, since it's no fun if some aren't pulling their weight or if you're constantly re-educating new members. Also spend some time on the BetterInvesting site to make sure you know what you're getting into. Then jump in and swim. It may be old-fashioned, but it's still the best way to learn.

Scott Bernard Nelson is a newspaper editor and freelance writer in Portland, Oregon.