There’s an old adage that goes “no one takes better care of you than yourself,” and when it comes to the world of investing, that is often the case.

To many, such a reality can be a pretty scary thing. A peaceful, restful night on a fluffy pillow can quickly take a sudden turn for the worse when thinking such thoughts as, “Will I ever have enough to retire?”

Awake, staring at the ceiling, don’t bother reaching for that warm glass of milk. The best medicine certain to calm such thoughts is to gather up a few friends and start a good
old-fashioned investment club.

There are some who falsely believe an investment club is nothing more than an excuse to get together and share recipes or a recap of last week’s blind date. Quite the contrary. Forget leading economists, Wall Street analysts, hedge-fund managers and day traders. Some of the best investment ideas I’ve ever heard are from the investment club meetings I’ve been lucky to attend.

After all, it was the Irvine-Pacific Group that gave me some great tips on little-known food product companies, as well as some of the best chocolate chip cookies this soft belly has ever had. It was the Harbor Club that turned me on to obscure Energy Trusts, and I’ll never forget a fantastic club in Long Beach, California, that not only told me some steamy secrets about a local celebrity, but more importantly, a stock tip on a tiny company that turned into a monster success.

Investment clubs have been around since the early 1900s, and it is estimated there are well over 100 new ones registered every month. One of the most famous investment clubs, the Beardstown Ladies of Illinois, were not only successful investors, but they also wrote a
best-selling book that sold nearly one million copies.

So, what exactly is an investment club?

According to the Securities and Exchange Commission, an investment club is defined as “a group of people who pool their money to make investments. The group then decides to buy and sell shares based on the majority vote of its entire membership.”

In my view, an investment club is an exciting, enriching experience where great investment ideas often evolve. Think of an investment club as your very own “private mutual fund” whereby members of the “fund” invest money and vote on which stocks to buy. Most clubs have roughly 12 to 20 members who typically meet anywhere from once a month to once
a year.

Starting an investment club can be a snap. I highly recommend visiting the National Association of Investors Corporation (NAIC) Web site at www.betterinvesting.org. It will tell you everything you need to know about getting your own club up and running.

Once formed, one of the first things to be decided is how much everyone will invest and in what intervals: Single deposit? Monthly? Annually?

Next is the investment style. Looking to give Trump a run for his money or invest for the long haul? Going after a seven percent or 50 percent rate of return? All this and more must be decided. Then, it’s time to lay down some money and start picking
the winners.

While there are hundreds of investment styles to choose from, the most successful investment clubs typically follow the most basic, prudent investment philosophies.

Don’t put all your eggs in one basket.

You’ve heard it a thousand times before. However, I can’t help but remind you of the top three rules of investing: diversify, diversify, diversify. Be sure to spread the risk not only among different companies, but different industries, as well.
Love the product? Bet the company.

This timeless, powerful strategy has led to some of the greatest investment success stories I’ve ever encountered: find a product you absolutely love and can’t live without, and if the members agree, buy the company’s stock. In recent years, the best stocks I’ve invested in weren’t due to the fancy and complicated charts this awful artist can draw, but the things I absolutely, positively cannot live without: my BlackBerry™ (Research In Motion), iPod (Apple) and Famous Amos® Chocolate Chip cookies (okay, so Kellogg, the company behind Famous Amos, hasn’t been the best stock around, but someone’s belly has to keep the company in growth mode, and it may as well be mine).

Forget the Grand Slams. Stick with the base hits.

Everyone knows what happens when you swing for the fences: you strike out. Remember what the legendary baseball manager Sparky Anderson always used to say: it’s singles and doubles that win games, not the home runs.

Ride the winners; cut the losers.

As sad as it is, the companies you invest in have no idea who you are, and they don’t care about you. Don’t take that personally. Just realize that when it comes to investing, you should treat them the same way as your last and next date: if it isn’t making you happy, life is way too short. Don’t get emotional, just get rid of it. Simple as that.

So, have a couple of friends interested in investing? Do you crave social interaction, sharing investment ideas, a good cup of coffee and maybe a few gooey desserts? By following the suggestions above, it won’t be long before you and your friends are well on your way to investment success. Watch out, Warren Buffet! I wish you the very best of success, and hey, if you come across any good stock tips (or some fantastic chocolate chip cookies), be sure to send them my way.•