how much money can i actually invest in a dow jones stock?

Question

i have 5,000.

Answer 1

Is this a trick question?

You can invest $5,000 worth of whatever stock you buy (not including the commission).

In terms of what you can buy, that's a different story. "Dow Jones" is typically a term used for the Dow Jones Industrial Average (DJIA), but the Dow Jones Group does have other indices. The DJIA is made up of 30 different stocks, so you can pick and choose which stock to make. The 30 stocks are a mix of American stocks, but are all large-cap with some bias toward industrial stocks. The component stock with the lowest price is Intel (INTC: $21.00 close), which would give you 237 shares assuming a $10 trade commission.

A better way to buy the "Dow Jones" is to buy the Diamond ETF (AMEX: DIA $122.38). You can buy 40 shares of the Exchange Traded Fund and be much more diversified.

All you need is an account. Happy investing.

Answer 2

A single share of stock represents a % of the total value of the company. So the most that anyone can buy in a single company is 100%. However, with $5,000 you would be limited by that budget and would most likely afford about 100 shares of a company. You could also either split that money up into 3 stocks, or buy one or two mutual funds.

Answer 3

WIth that small amount should buy a S&P index fund or etf. [e-mail] if need info on how to do so. Way too small to buy individual stocks.