Successful investing is a lonely pursuit, or so we are led to think. Investors are frequently warned to avoid dangerous groupthink, to hold back from 'crowding' into hot trades, and to conduct their own research rather than blindly following others. 'Follow the herd' is an established investment mantra only for those who are involved in momentum investing
And yet investors have often banded together with great success. Nobody is an island, and as any professional investment committee will tell you, stock and fund pickers can achieve a lot when they channel their knowledge and resources. In the private investor space, successful individual traders can command huge followings, while users of Reddit’s Wallstreetbets forum famously managed to outgun hedge funds shorting GameStop (US:GME) in 2021.
But there are far earlier examples of individual investors working together, albeit in less dramatic fashion. So it has been for share clubs, also known as investment clubs. Often comprising groups of friends or relatives who run a shared portfolio and debate potential new holdings in a social setting, such clubs were both lively and numerous at the turn of the century. Many are now long-standing entities, and over time they have helped thousands of individual investors to learn more and hone their skills.