Five tips for running a successful investment club

1. Communicate with everyone

Email agendas and details of new shares up for consideration in advance so that members can research and contribute to discussions.

2. Draw on experience

Use members' expertise, whether through their work, interests or daily life, to identify interesting areas or companies.

3. Appoint champions of specific sectors or shares

"Clubs tell us they find this a particularly useful exercise for building members' knowledge," says Guy Knight, sales and marketing director at The Share Centre.

4. Have a clear process for selecting shares

It's important that each member gets chance to nominate a share. Ask members to present their suggestions and then get everyone to vote on which to buy, on a 'one member, one vote' basis.

5. Have an exit strategy and stick to it

Knight says club members tend to be very reluctant to sell a holding, whether to take profits or because it's a basket case. He recommends the use of 'tracking stop losses', so a share is automatically sold if its price falls a certain percentage (say 20%) from its last peak.

"It can mean you sell shares that recover - but it does avoid holding on to those that carry on falling, and also stimulates turnover and new investment in the portfolio," he says.