[Tcohle]

Basically, my brother and I are interested in getting together and making investments. The goal is to educate ourselves about the market and it also just sounds like an interesting thing to do. I don’t think we’d put in a ton of money. Just something on the side.

So we were thinking (brainstorming) that we could pool X amount of dollars/month and put it into an account. Then we would have regular meetings to determine where we could invest money. Whether it’s just putting it into a mutual fund for now or finding companies to buy stock in.

There might be a few other people involved so we agreed something should be in writing. Is this technically a Personal Holding Company? Anyone have any suggestions on how to get started, or their experience, good or bad, with doing this?

AUD - 84
BEC - 75
FAR - 76
REG - 87

Ninja Notes/MCQ/Book/Audio for all

FAR- 5/11/15 76!!
AUD-10/31/15 63, 84!
REG-7/12/16 72
BEC-8/31/15 75!! Perfect Score!

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[Anonymous]

What is the purpose of pooling together money when everyone could just invest there own money? The only benefit I can see out of pooling money for investing is the trading fees would be split among everybody.

[Tcohle]

Well the idea is mostly to learn more about the market and trading in general. My brother and I know a decent amount but we thought it'd be a cool idea to do it together to bounce ideas off each other. Not expecting large returns in the near-term.

AUD - 84
BEC - 75
FAR - 76
REG - 87

Ninja Notes/MCQ/Book/Audio for all

FAR- 5/11/15 76!!
AUD-10/31/15 63, 84!
REG-7/12/16 72
BEC-8/31/15 75!! Perfect Score!

Wiley CPAExcel Platinum
Ninja 10 pt combo for FAR/AUD/BEC

[Substantive Testing]

I like your thinking. This could be great educational hobby and it can even turn out to be a stepping stone into opening your own hedge fund or private equity fund (its only 15,000 paper work fees). First by practicing with your own money, learn as much as you can, and get to a point in which you getting reasonable returns. Then, you can move to step 2 in which you track down investors and pitch them about your own investment modules and basically what you think could work in the market. I recommend stocks and options. Bonds are too slow paced and too dependent on interest rates. You do not learn much from mutual funds. Just by browsing stocks, it can already entertain you full-time. I suggest you to browse through the ins and outs of every industry and narrow 4 industries you would like to get into, and then cherry pick potential stocks. By other people, do you mean friends or relatives?

AUD - 75
BEC - 75
FAR - 81
REG - 78

 

CPA ex-auditor

 

[Tcohle]

Yes my brother has a few friends that have the same mindset we do about a team. Good point about narrowing it down to industries.

AUD - 84
BEC - 75
FAR - 76
REG - 87

Ninja Notes/MCQ/Book/Audio for all

FAR- 5/11/15 76!!
AUD-10/31/15 63, 84!
REG-7/12/16 72
BEC-8/31/15 75!! Perfect Score!

Wiley CPAExcel Platinum
Ninja 10 pt combo for FAR/AUD/BEC

[Substantive Testing]

Starting with too many people is not a good idea, it could make things way more complicated relationship and business wise. Just you and your brother could be a great starting point, and not adding anyone else until you both are profitable. The stock market is very unforgiving for newcomers. You will most likely tank some losses on the first year, but that is also part of learning the stock market's behavior.

AUD - 75
BEC - 75
FAR - 81
REG - 78

 

CPA ex-auditor

 

[Skynet]

I invested in CPA review books for a number of years with their own edition. In a few years they will become Vintage an become a collector's item. Even have their NTS for Authentication too.

I'm hoping they will go up in value on day : )

AUD - 90
BEC - 78
FAR - 84
REG - 87

World Domination Plan

Phase I : Pass CPA Exams - Complete
Phase II : Megan Fox - In Progress
Phase III : Megan Fox & Scarlett Johansson Lingerie Pillow Fight
Phase IV : Form the new Charlie's Angels with Megan Fox, Scarlett Johansson, & Gal Gadot
Phase V : TBD

BEC : 78
REG : 87
FAR : 84
AUD : 90

World Domination Plan

Phase I : Pass CPA Exams - Complete
Phase II : Megan Fox - Initiated
Phase III : Bring back 8-Tracks
Phase IV : Megan Fox & Scarlett Johansson Lingerie Pillow Fight
Phase V : TBA

[ScarletKnightCPA]

It sounds fun, but honestly you are probably just better off investing into low cost passive index fund.

Far: 76 (Wiley Test Bank)
Aud: 77 (Wiley Test Bank)
Reg: 61, 76 (Wiley book, Wiley Test Bank)
Bec: 86 (Wiley Test Bank)

MBA in progress

[thebigguy1992]

you are not going to beat the s&p 500. Not many people do. Therefore, you should invest in a low cost index fund. In the end, low costs win out.

BEC - 79
FAR - 62,73,76
AUD - 70, 88
REG - 83

[tmacpa]

if you're just getting into investing and trying to learn I'd recommend downloading the robinhood app on your phone.

No fees at all, if you're just starting out you'd probably be super reluctant to buy any stocks if there were fees for every trade.

AUD - 78
BEC - 79
FAR - 78
REG - 90

short-term sacrifice = long-term gain

[mckan514w]

I don't think that its a Personal Holding Company? I think its more of an investment club and I think I remember something in REG about it??? My mom did this a while back right after I got my series 7… she and a group of 5 co-workers each pooled their money and met once a month to discuss the market, how they were doing, etc… each month each member was responsible for researching an investment they were interested in whether it was a stock, mutual fund, bond whatever. She learned a lot about the market as well as investing and they even made a little bit of money by the end of things.

And they ask me why I drink

BEC 71, 82
AUD 75
REG 75
FAR 61, 69, 83

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[Substantive Testing]

From my personal experience, I learned 1000x more playing with real money than playing with a stock app. Also, if you trading under 10k, I do think indexes are going to be a better option, but if you trade above 10k, then stocks are way worth buying. You might not be able to beat the S&P 500 Fair Value, but you will definitely get more return due to dividends.

AUD - 75
BEC - 75
FAR - 81
REG - 78

 

CPA ex-auditor

 

[Tuthegreat]

That's not a Personal Holding Company. I believe there is an actual Asset threshold $$ to be deemed a PHC. There's various entities that you could form to do what you want. If it's not a lot of money involved, less than 25,000, it's not even worth doing. The SEC gives so much emphasis on Pattern Day Trading that it kills the thrill.

Also, I found when you have too many “investors” everyone wants to invest differently. Everyone has their own risk tolerance.

[ScarletKnightCPA]

I don't want to totally discount active investing as a strategy to generate profitable returns. It certainly is possible, but actual opportunity and risk is constraining factors. A recent ‘obvious' investment was Nintendo's bump with the release of Pokemon go. Once the release date was encroaching with no problems, it should have been obvious that the game would be a smash hit for anyone aware of the game's established history, mobile technology development and market penetration, development in social media ‘buzz', and free access lending itself to mass universal appeal.

Problem is being personally aware of all these factors through having live it only occurs once every few years in my personal experience. Last time I experienced this certainty was with google IPO which was nearly 10 years ago.

Additionally, being sure of a company's product being a smash hit is not enough… you have to be aware that it will be a smash hit, and most other important decision makers must not be aware of this, otherwise the stock price will already reflect this… this is where young folks who are aware of recent cultural development may have a advantage if they are able to tap into this.

Far: 76 (Wiley Test Bank)
Aud: 77 (Wiley Test Bank)
Reg: 61, 76 (Wiley book, Wiley Test Bank)
Bec: 86 (Wiley Test Bank)

MBA in progress

[Anonymous]

Something you might try first would be a “virtual stock portfolio” game. I think this is the one that I saw a couple years ago, but not sure cause just had to Google it again: https://www.wallstreetsurvivor.com Basically the game gives you an amount of pretend money, and you use that to “invest” using real current stock information. So, at this moment, Google's stock is $815.98; it opened at $803.93. If you had $10,000 as your starting amount of money in the game, you could “buy” 12.255 shares of Google, and then sell later, hold longer, etc., and until you sold it you wouldn't be able to make any other transactions. I don't think that the game accounted for transaction costs for buying and selling, so you'd have to adjust your returns for that, but it still lets you see if you're predicting market trends well.

If you're just starting out with the market, I'd be inclined to have each person in the club get an account in this game and compare strategies, talk through what you each did during the past week/month/etc., and learn that way, rather than pooling money and risking real money from the start. You'd be able to see things like that the more aggressive people in your group do better during better markets and the more conservative do better during worse markets, and as you learn tricks from each other, probably eventually you'll end up with fairly similar returns. With the pooled money option, especially if you'll all have to agree on the decisions, it seems like the process would be too slow – nothing would be done for quite awhile until you could all meet and talk about it. Markets are too finicky to have once-a-week/month/etc. meetings to determine when it's time to buy, sell, or hold.

[Tuthegreat]

Interactive Brokers offer this “pretend” account. One of my fiance course made us do it. But I always beat it because the “virtual” market lags behind the “real-time” market. So I always know when the real market is about to tank and dump my stocks.

I always YOLO my “pretend” portfolio as well.

[Author]

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