Student: Gasimli Fidan Speciality: Business adminstration

Student: Gasimli Fidan

Speciality: Business adminstration

Group: 189409

Subject: Cooperative management

Topic: The Difference between cooperatives and investor club

Teacher: Khanim Guliyeva

What is investor club?

• An investment club is a group of individuals who join together to invest in the stock market. A club could be made up of families, neighbours, friends and colleagues at work. For many people, an investment club is their first experience of the stock market. A recent report found that around two-thirds of recent investment club recruits had never traded a share before joining the club.
• The first investment clubs were set up in the UK in the 1950s, but their numbers remained quite small up until the 1990s when popularity soared.

Cooperatives are people-centred enterprises owned, controlled and run by and for their members to realise their common economic, social, and cultural needs and aspirations.
Cooperatives bring people together in a democratic and equal way. Whether the members are the customers, employees, users or residents, cooperatives are democratically managed by the 'one member, one vote' rule. Members share equal voting rights regardless of the amount of capital they put into the enterprise. 
What is cooperatives?
For the sake of argument, let us assume that a group of investors could establish a cooperative. In so doing, we are sticking close to the objective of shareholders: maximum return on invested capital. So what are the differences between a cooperative and an investors’ club?
To start with, you surrender a degree of influence. You take your money to the cooperative, and the cooperative invests it for you. You have some voice in decisions, but you share decision-making with others. If the majority chooses option A, you cannot persist and invest in option B.

Defference between cooperatives and investor club

You are willing to go along with the majority if you believe the cooperative has some extra value. There must be a presumption that there is strength in unity. In some cases, you may see a market in which big capital receives a better yield, or greater market rewards; in other cases, there is no opportunity at all for small capital, or small players. You may conclude that risk can be spread and managed better cooperatively, and frequently you have gained confidence, knowing that expertise can be shared among members or hired from outside.
When you establish a cooperative, you also create obligations. Expenses are incurred(personnel),operationalinvestmentsaremade(officepremises),andcommunal funds are invested to produce returns. After that, it is difficult to withdraw invested funds should you decide that option B was a better choice after all or you need your money urgently for some other reason. Membership also means that you are obliged to contribute your input, otherwise there are regulations that hamper or delay withdrawal of funds or membership. At the very least, the cooperative will consider you disloyal and not be so ready to take you back into the fold. That is a particular problem if the cooperative does indeed have an extra value. These are all issues that are of no concern to passive stock shareholders: they may be as disloyal as they please.
The previous section emphasized the difference between dividend and share value. One member may be more interested in a good annual payout(forinstance,meeting the expenses of children attending schools and universities), while another may be more interested in a long-term investment that will ultimately produce a better yield. This distinction is not relevant to shareholders: anyone who wants to cash in can do so whenever they wish, and to the extent that they wish.
The advantage sofanyprofit maden by the cooperative are exclusive to the members. Anyone who wishes to share in that success must become a member. Whether that is possible depends on the situation. The doors will be wide open if big capital produces more profit, but will close when there is no big capital left.
This example is given to demonstrate that the interests of the members can vary widely, even in relation to a single-minded objective such as achieving returns on capital.Lookingatourexampleobjectively,weseeacontradictionbetweenthemembers who need returns in the short term and members who feel that the long term is more important.
A Cooperative is not an Investors’ Club general terms, the goals are different. Subjectively, there is also a contradiction since dissension can arise about which strategy the group should follow. Both contradictions are a problem because the cooperative is a democratic association. Members have to be compatible with each other.
The Result

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