An investment club is just like a corporation with a X number of people adding a fixed amout of cash and pooling this to buy and sell securities.
I've been in a couple before and they are good becuase the club can buy a stock with some volume.
An investment club can be set up through any brokeage firm and all the assets are protected by the firm. No single person in the club can cash it out. People in the club are selected by the members to communicate with the brokeage firm to buy and sell, but everyone in the club has input on what to buy and sell.
With the internet it is a lot easier then years ago because anyone can become a member from any where.
This is probably the best way for the small investor to gain real wealth if each member is willing to commit 5 years or more to the club.
There are number of ways to fund this club, the members can decide on an initial deposit like 500 dollars each in the beginning and add to this on a monthly or quartly basis and keep building the club and the buying power of the club.
What a club is doing is becoming a self directed mutual fund for the members.