Stock Investment Club

Just started an investment club. Was able to raise funds for investment just last night. Is this perfect timing? We hope that the sudden steep drop in equity prices has given us an opportunity to ride the bull market.


Objectives:

To invest in the Philippine Stock Market starting today.

To at least double the money invested within five years (or to approximate its gains which comes to about 15% per annum). This alone is far above the rate of returns currently available for limited funds in the fixed income market.

The objective is to stay invested for the long term, but initially there will be semi-annual reviews for the direction of the club and members are committed to stay invested for at least 6 mos to one year.

Strategy:

Given the modest amount of capital, the funds will be invested in aggressive growth stocks to be able to maximize returns. It is likely to be invested fully in a single stock for most of the time (or until the funds are enough for diversification into more than just one issue)

A target of 10 to 30% profit gain is the target price for selling.

A cut loss limit is set at 10 to 15%.



Fund Mechanics:

Initial fund is Php 70,000. So at the initial Net Asset Value (NAV) of PhP 1.00 / unit of investment;
Investor A = Php 20,000 or 20,000 units of investment
Investor B = PhP 20,000 or 20,000 units of investment
Investor C = PhP 20,000 or 20,000 units of investment
Investor D = PhP 10,000 or 10,000 units of investment

Future subscriptions will be based on the fund's NAV at time of subscription.
New members will have to be pre qualified and minimum investment is PhP10,000. Subsequent investments will be at a minimum of PhP 5,000.

NAV = Fund Value / No. of shares

The fund will be having a lock out period of one year, and at which time, the fund may be dissolved, dividends may be given, or may be restructured. An existing investor may buy out another investor with the consent of all the other members.