How can you make money investing in stocks with sharebuilder.com or other sites that charge $4/trade?

Question

Say an investor wants to start small with like $500.00 and the stock moves slow, each time I buy, I'm paying $4, does it pay to invest like this?

Answer 1

It's good way to invest in the stock market. $4 is definitely the lowest comission you will pay for a stock purchase. But I wouldn't go that route unless you have at least $100 to invest every month or week or whatever. You never want to pay more than 4% for commissions.

Answer 2

You need to take into account how much your losing when you buy stocks. Lets take your 500 dollars.

If I buy 10 shares at 49.60 per share dollars plus a 4 dollar fee I've paid 500 dollars for 4 shares or 50 dollars a share.

I'll won't see a profit till it reaches 50.41 dollars per share. Because 10 shares times 50.41 dollars a share minus the 4 dollars in fees equals 500.10 dollars. So I've made a whole ten cents even though the price per share went up 81 cents.

So if your stock is moving slow how long will it take to reach 50.41?

It will be a slow process if you only have 500 dollars to start. What I would do is invest in a stock that at least pays me a dividend more than 1.6% while I wait for the price to go up. Financial stocks have a good dividend return so do REITs and Trusts.

The best thing to do is to research the stock you want to buy and don't be afraid to sell when it starts to lose money. If you picked a loser don't hang on to it. Learn from your mistake and move on. Everybody will pick a loser sooner or later. If you picked a winner sell a little bit of it and buy something els, start the process all over again.

If your still young the 500 dollars will grow if you take care of it, watch over it and don't neglect it. I opened an account with my income tax return. Each year I would research a couple of stocks and buy another stock.

Answer 3

A better might be a mutual fund to begin with. Some front end load funds will allow you to begin with $500. American Funds comes to mind. And generally that one has a good track record.

There are closed end funds also available that you purchase like a stock. GAM has a good track record. You could buy it through sharebuilder.com Remember that for your $4.00, if I am not mistaken, they purchase only on Tuesday or Thursday or something like that. You have no idea what the purchase price will be. But for long term investing, buying good stocks it does not really matter a great deal. The idea behind sharebuilder is for the small investor to be able to build a long term portfolio.

Answer 4

Wait till you have at LEAST $1000, otherwise the commission fees take up quite a percentage of your gains. If I were you I would put that into an interest bearing checking or savings account. You can find the best ones online at money-rates.com, I personally use HSBCdirect savings- gives you a 4.65% interest rate which is good to just hold your money.

Then, Sack away as much money as you can save without lowering your standard of living until you have saved up at least a thousand dollars. It would be BEST if you could save up $5000, but $1000 is definitely better than starting with the $500 you have now.

While you are saving, research stocks you're interested in buying. Watch the charts, wait for the right time. That's about the best advice I could give you.

Answer 5

I dont know about sharebuilder.com, but I am pretty sure that everywhere you go they are going to charge you a fee. I used to use a company out of Portland, Or and they charged $11 a transactions. You just need to be smart, save some money and then buy a bunch of shares at one time, dont buy like 1 share every day because then you are paying too much in fees.

Answer 6

Research the shares carefully, hold onto them for the long term (say 20-30yrs), reinvest the dividends..... invest at least a minimum of $100 a purchase to buy enough shares to wipe out the cost of the commission fee as soon as possible.

Answer 7

purely tell them what to take a place in with their money. regardless of broking service they use would desire to hint the overall performance. additionally, being a newbie, i recommend you communicate approximately share features. with the intention to have solid looking nominal features, you will would desire to take a place various significant which could be difficult to convince your mom and dad to do. in spite of the undeniable fact that, possibly some thing like 10 grand to commence off with does no longer be too difficult to convince them to fund study the thank you to apply economic diagnosis, promoting and marketing perspective, each and each marketplace's features, contingent liabilities, administration historic previous, operational performance and destiny potentialities additionally study what "high quality earnings" potential. ask annoying questions and don't assume a element. consistently discover as a lot info as a possibility