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Do investment clubs boost youth culture in stock saving?


Generally speaking, investment clubs which are groups of people who collect and pool their money for investment, play a very important role in boosting the saving culture in capital market by youth, as they help them to exactly know where and when to save their money by issuing stock and bonds in which there is a return in a form of interest and dividends thus attracting them more in saving a part of their disposable income to be able to buy more in future. In this essay we will look at how the investment clubs impact the youth saving culture in capital market.

 

It is worth stating from the outset that saving in the capital market requires no much money, where individuals with low income can still save by issuing stocks at the capital market, the youth who in most cases are considered to be low income earners, with no jobs or being allocated pocket money they can still save by issuing stocks at the capital market which will have returns as dividends. But though they can invest in stocks, they are often discouraged because of the level of income from their low investments, the lack of knowledge in capital market operations and the fear of bearing loss alone.

 

As far as investment clubs are concerned, they are easy to form whether by amateurs or professionals, their operations are not complicated as not too much experience is required thus maintaining them is easier when the participants are focused toward the same goal. This is far more attractive for youth, as members of such clubs are putting together their money for more return on saving where together they can issue either stocks or bonds and share both income and losses from their investments, which is better than losing alone for as a group the recovery is quicker and the weight of the loss is less and this will increase the will to save in youth.

 

Moreover, engaged members learn a lot about how to manage their funds and meet valuable contacts interested in the same topic from whom they gain experience, skills and discipline to improve their management skills. As they meet periodically dealing with stock market issues and how it works, this end the bias of the lack of knowledge in the capital market operations and make them interested to invest their money in stocks, bonds and mutual funds, because these meeting build in them the concept of financial analysis and they learn more how to read stock market charts and quotes.

 

Additionally, through such clubs the youth members are free to give their own opinions about suitability of new investments and the performance of the pooled funds, thus creating the atmosphere of confidence toward the placement of their funds and bring more through increasing saving from their disposable income to be invested and thus boost the culture of saving in the youth members of the clubs in capital market operations, as they can observe how the pooled funds are increasing in value and amount, they have the tendency to consume less of their disposable income and follow the path of saving in issuing stocks and bonds.

 

It should also be noted that saving by issuing stocks, bonds and mutual funds, earns more in less time of maturity than normal bank deposits whether current account deposits, saving account deposit and fixed account deposits, youth in such investment clubs prefer to save more of their disposable income in capital market by issuing securities at the stock market where at the time of their maturity they can sell them and invest in other ventures when they have raised enough capital. Therefore, this is one way that youth can use for them to raise capital to invest in their own businesses and this will boost the saving culture in the capital market.



In summary, investment clubs play a big role in boosting the youth’s saving culture in capital market, as no huge amount of money is a must and members can contribute according to their means, by gaining also a collective wisdom which is combined with information from various research which serves to make best decisions, leading to lucrative capital gain in individual saving and individual wealth which will lead the members to consume less of their disposable income and save more in issuing securities at the capital market.  

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