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That suggests that, on an aggregate basis at least, club members have been doing nicely. The three most widely held companies by investment clubs in its most recent edition (compiled at

the end of 2020) are Apple, Amazon and Microsoft. But there are some worrisome numbers, as well. One academic study from 2000 — “Too Many Cooks Spoil the Profits,” by professors Brad

Barber and Terrance Odean — revealed that 60 percent of the analyzed clubs underperformed the market and that, on average, clubs lagged broader benchmarks by 4.4 percent annually. A

main culprit for that result was frequent trading, with clubs turning over their portfolios by around 65 percent every year. (One caveat from the study’s coauthor Barber: “Much of the

underperformance is from transaction costs — spreads and commissions, which have declined dramatically since the 1990s when the study was conducted.”) There are also cautionary tales, like

the famous Beardstown Ladies, whose homespun Midwestern wisdom supposedly led to eye-popping annual gains of 23.4 percent, according to their best-selling book in the 1990s. As it

turned out, minus club fees and accounting for math errors, their 10-year average returns were a more modest 9.1 percent. Instead of a road to untold riches, think of investment clubs as

more of a social and educational endeavor. By dividing the research labor and stress-testing different investing ideas, you can boost your own market IQ and apply that knowledge to the rest

of your non-club portfolio, too. At the same time, you can broaden your social network and interact with your group regularly. In an era when researchers consider loneliness epidemic —

especially for older Americans, whose circles have shrunk over time, particularly so in this pandemic period — that is no small benefit, as socializing can bolster both mental and

physical health. “It’s a very social activity,” says John Wasik, author of _The Investment Club Book_ as well as his most recent _Lincolnomics,_ who himself was part of an investment club

for many years. “Once people get into it, it can be a good way to make money and to do something interesting in community with other people." Of course, even with plenty of research and

the best intentions, stocks can go down. And individuals are typically vulnerable to all sorts of behavioral biases that can make for bad investors, like chasing returns of the latest hot

stock. But if you go into investment clubs with your eyes wide open, they can be a useful way to learn about the markets, stay connected and build a portfolio to supplement other savings.

“My advice is, don’t let it scare you even if it’s not something you’re used to,” Bonhom-Williams says. “My whole thing is, be slow and right, instead of fast and wrong.”​ Ways to Avoid

Investment Fraud _Chris Taylor is senior correspondent with Reuters, covering personal finance and workplace issues. He is a frequent contributor to _Fortune Magazine_, and has won

journalism awards from the National Press Club, the Deadline Club, and the National Association of Real Estate Editors._