An investment club is a group of friends that organize to pool their money and invest in the financial markets. A possible advantage (given the state of the markets currently) of forming a club is the strength in numbers concept, and the diversity of ideas and experiences that the individual members bring to the group.
If you are interested in forming an investment club begin by talking with your friends. Discuss your interests and what kinds of experiences each of you have with investing. Most sources agree the ideal membership size is 10 to 15 people. Begin researching different websites and books about investment clubs and investing in general. Two great resources are The National Association of Investors Corporation and their Official Guide.
Members will need to agree on monthly contributions and what the financial goal of the club will be. Decide on how often you will meet, usually monthly, and where. Agree on a name for your club and draw up the necessary contracts and agreements.
Read what the SEC has to say about investment clubs. Most likely you will not need to register with them as long as every member participates in the investing decisions, you don’t offer securities to the public and you don’t have more than 100 members. Check the NASAA website for the securities laws for your state.
Some other resources include Investment Club Help and American Association of Individual Investors.