How do the members of an investment club make decisions for the club?
Members of investment clubs vote on administrative matters and whether to buy or sell stocks. There are two common voting methods: One member, one vote; or A weighted vote based on ownership percentages. A weighted vote is accomplished by each member voting their percentage of ownership of the club’s assets. Let’s assume that the club’s assets total $20,000.00. Member A’s capital account is $1,000.00. Member B’s capital account is $2,000.00. Member A has 5% of the voting power and Member B has 10%. NAIC’s suggested partnership agreement provides for voting in proportion to the value of members capital accounts. However, the members of a club should decide which is best for them and specify that method in their partnership agreement.
