Share clubs have become a popular way of adding sociability to investing in the stock market, as well as sharing some of the risks of investing. In the UK, there are more than 12,000 clubs with over 150,000 members.

So how do you go about setting up a share club? Here are some tips:

How to set up a share club

* Assess the level of risk you want to take and pick others who share the same objective.
* Pick suitable officers: Chairman, Treasurer and Secretary.
* Establish areas of expertise in the membership and assign roles accordingly.
* Keep up-to-date accounts of the value of the portfolio and each member’s contribution.
* Meticulously research the companies you invest in.

What not to do

* Don’t panic is shares do badly at first. Think long term.
* Set “stop-losses” — the level at which you will sell falling shares.
* Don’t let talkative members have an undue influence in the choice of shares. Give everyone a chance to select.
* Don’t pick a group of similar people, or you’ll end up with all shares in one sector.
* Don’t rush into buying. Any doubts should mean rejection.

Share clubs are good for some people, but don’t suit every personality type. Assess your own needs before joining one … or setting one up.