what is the least amount of $ i need in order to invest in the stock market?

Question

I called a broker and asked what I could do with $1000 to invest. I didn't want long term mutual funds, or bonds - I just wanted to risk the cash and buy something I could watch go up or down on the market - He said with such a small amount of money he'd be wasting his time to work with me. Is my idea really that crazy?

Answer 1

You can invest with $500 minimum with a discount broker online. I use Scottrade. It is not a crazy idea. You don't need a full service broker who is there just to make themselves a commission, not to make you money. Once you deposit the money you can buy any amount of stock just remember the commission cuts into it, but many people buy $100 worth in penny stocks.

Answer 2

Great question. Ideally, there is no ideal amount, but with the advent of brokerages that charge 7-12 dollars or more for each trade, then it would make sense to have this amount be roughly no more than 1% of your portfolio. For instance, if you start with about 100 dollars, and then have one trade that costs 7 dollars, that cost just took out 7% of your portfolio! This is ridiculous considering that the avergae yearly return on the market is 8%. Assuming youve earned that 8% after a year (which most people can never earn because theyre too diversified and inpatient) that leaves you with a whopping 1% earning on your investment. That doesnt even keep up with inflation, and you couldve gotten at least 4% risk free in an ing savings account! I would suggest starting with about 1000 and just choose 1 stock that you are confident in holding for the next 10 years or more (do your hw: stock should be cheap with a PE ratio of under 15, great management, great competitive advantage, and a product that does not need to be redesigned every year, ie coca cola as opposed to pfizer). Keep builiding up on your equity in this stock, and if you must, eventually diversify into a maximum of 5 companies total. Keep the commission costs low, and just buy and hold. I would study warren buffett's philosophy if you dont agree with buy and hold. If it worked for him, why not follow his advice?

Answer 3

The broker is a jackass.

You can easily invest $1,000 online.

You just need to:

1) Open a brokerage account
try www.tradeking.com, or www.zecco.com. Be sure to read the fine print before you open an account.

2) Personally I would recommend investing in an index fund of some kind (you can buy what are called exchange traded funds, mutual funds that trade online, for example IVV) since it'd be hard to diversify properly with only $1,000. But if you can afford to risk losing a substantial part of the $1,000 there's nothing inherently wrong with investing it in one company.

Answer 4

You can buy any amount of stocks the thing is, if you put in 1000 dollars and only end up with a 2 or 3 percent return, you'd be wasting the brokers time because you can manage it on your own, if you want to invest the 1000, find someone who will tell you what to buy, try another broker, then keep buying until the you get a decent amount of annual return ie. if you buy 25,000 worth of stocks and get 10 percent return you made 2500 dollars instead of 100 dollars on 1000

Answer 5

He doesn't want to waste any time earning a commission that might be 9.95 for the firm so if he is commissioned he would get like $2 to spend hours teaching you about stocks.
You can open a no load mutual fund from a fund family like Vanguard if you have the minimum there isn't any cost to purchase and you have fees on the account, read the prospectus to find the fees and goals of any fund you choose.
You can open it as a IRA or ROTH IRA so you don't have to track you cost basis for your taxes.
You can buy a single share of stock but after commission you would never make a profit the first few years.
Mutual funds avoid the whole eggs in one basket thing.

Answer 6

hi, your intention to make use of your money by investing it is really good, but making money by investing is not easy. you have to first study, study and study. don't let anybody tell you what to do with your money. you can only do that if you EDUCATE yourself FIRST.

warren buffett has 2 golden rules with money and investing.
rule no.1: don't lose money
rule no. 2:don't forget rule no.1

do yourself a favor, educate yourself first before thinking of putting at risk your money. buy books like:
1. technical analysis by john murphy
2. come into my trading room by elder alexander
3. the new market wizards by jack schwager
others...

you can DEMO TRADE this http://www.northfinance.com/ forex/indexes/cfd/futures/metals broker by downloading the software metatrader (you don't have to call anybody when you place/open a trade with this, you just put key it in in the software). if you are serious about trading, demo trade first and as you gain experience and confidence, that only then you should think of opening a live account.

if you trade without educating yourself first, you might as well bring that money in a casino.

my two cents.

i hope am able to help.

Answer 7

Hi, i recommand you a good and basic tutorial for investing. it covers all Issues related to your Investing and everything around it.

http://www.investingtutorial.info/

wish it will help you.

Good Luck , Best Wishes!

Answer 8

Well, no. Anyone who bought $1,000 of Microsoft when it went public is a millionaire today.