How much money does one need to start investing in the stock market?

Question

$500, $1000, etc and what would be my first step.

Answer 1

Begin with $500 minimum and buy a small block of shares, then as additional capital becomes available, begin to put whatever you can monthly into your stock account, ... $300 a month or so should be a good start. Once you have about $1500 or so invested in one company, then begin to put additional capital into another company and diversify; when you reach over $5000, then consider a third company to invest in.

Answer 2

The first problem you will have is that most (if not all) brokerages require you to open up an account with $500 minimum deposit. So you will have to wait until you get that much before starting to invest. As for how much you can make, the stock market historically returns 8% per year, so if you had the entire $1,000, you could expect to make about $80. However, that does not include commission, which is usually around $7 per trade, so if you bought and held $1,000 worth of any stock and made the historical average, you would have $1,073 at the end of one year. If you were an active trader, at $1,000, the commissions would probably eat you up ($7 for each buy and $7 for each sell means you would have to make a 1.5% on your investment before seeing a profit) Before you even think of investing, your should read a book on two on stock market investing and then after that a book or two on analyzing stocks.

Answer 3

Your first step is to sign up with a brokerage. There are online brokerages like Tradeking (www.tradeking.com) and Zecco (www.zecco.com) that don't have a minimum balance. Past that you just need enough money to purchase one share of something and pay the commission on that share (note: make sure the broker you use doesn't charge you a fee just for having an account open...) Personally if you're just getting started I'd recommend buying an exchange traded fund that tracks the stock market as a whole (SPY or IVV). These are a lot safer than picking individual stocks. Otherwise pick a company that you're familiar with...

A few bits of starting advice:

Don't daytrade--it costs you money to place a trade and comissions add up. You also pay more taxes on stock you've held for less than a year.
If you invest in individual companies look for companies with good brands. Coke, or Apple probably won't go out of business tomorrow...

Answer 4

You can open an account at Scottrade for $500, but I honestly do not recommend it. Let me tell you, it's one heck of an experience, but with the amount of commission you'll be paying, I really don't think it's worth it.

I started with $500 at Scottrade and I learned a lot. I learned it wasn't worth it. I also learned you can't go tossing your money around (commission will eat you up). Next time I get into the market, it'll be with at least $5000. In the mean time, I think you should continue saving money and educating yourself, so you can defend yourself from loss when the time comes. I recommend you read 'One up on Wall St.' by Peter Lynch. This book is easy to read and you learn a lot. I also recommend you setup a fantasy account at a site like www.marketocracy.com (try to pretend it's the real thing). Also, if you are interested, I have a blog I have been working on. It's dedicated to the beginner investor. I even have an article about picking the right brokerage.

- There is a link in my profile

Good Luck
- Black

Answer 5

You can open an account with a discount broker like Scottrade with as little as $500. You can put this money in an index fund, either one of many no-load funds that have low minimums (the minimums are lower for IRA investments) or an ETF fund.

The commission on any sale or purchase at Scottrade is $7.00. You don't want to know how much a "full service" broker will diddle you for.

Call Scottrade and explain your goals and ask what mutuals or ETFs might be appropriate and possible for you. I have found them to be very helpful.

Etrade is another possibility, but they are very hard to taalk to when you would most want to talk to them.

There may be other discount brokers as well, I have not checked them all out.

Good luck!

Answer 6

you need to have 6 month income or 12 month expense for emergency fund. the leftover can be invested in stock market, but $10,000 to me is minimum.

Why $10,000?

because, you can have efficient portfolio through effective risk management with that amount of money. anything less than that, am afraid, emotional effect can effect your performance.

However, you can buy mutual fund to get started.

about the 2nd question, this article might help:
How to Get Started Investing in Stock Market - 3 Must Do Checklists
http://ezinearticles.com/?How-to-Get-Started-Investing-in-Stock-Market---3-Must-Do-Checklists&id=880761

Answer 7

Penny stocks are loosely categorized companies with share prices of below $5 and with market caps of under $200 million. They are sometimes referred to as "the slot machines of the equity market" because of the money involved. There may be a good place for penny stocks in the portfolio of an experienced, advanced investor, however, if you follow this guide you will learn the most efficient strategies https://tr.im/c8109

Answer 8

If you want to invest in stocks, then google DRIPS. Dividend Reinvestment Plans. You can buy stock in companies with as little as $10 a month in some cases.

I buy stock this way and have for the last 15 years. You can buy many different companies with DRIPS including McDonalds, 3M, Exxon Mobil, Pepsi, Coke, Proctor and Gamble, Johnson and Johnson, General Electric, Abbott Labs, etc, etc, etc

good luck

Answer 9

Depends on your age, income, risk tolerance, goals, etc.
$1,000 is better than nothing. Try an index fund.

But your very best option (for most individual investors) is a 401k (private companies) or 403b (non-profits, public employees) through your employer. Huge tax advantages & you can pick most any asset mix you want; the employer matching contrib is tantamount to an immediate 50% return.

I wouldn't recommend that most individual investors buy individual stocks, unless they 1) Are very very wealthy or 2) Buy them for entertainment or speculation, using money they can afford to lose.

In any event, I certainly wouldn't recommend "penny stocks" or any share that isn't listed on a major exchange (unless you work for a fund or asset manager). They're just not something you should risk your hard earned money on - historically, they lose $$ or are scams.

Answer 10

Try to invest in someones business. There is no minimum.
You may receive up to 20% guaranteed interest a year. You will not get such high guaranteed returns on stocks, mutual funds, bonds or CD's.
If you invest $10,000 at 20% annual interest rate, you will get back $24,883.20 in 5 years. I run my own business and my net profit is over 5% a month.

Email me at [e-mail] and I'll give you a valuable advice if you are serious about investing. Please don't forget to mention your nickname and question at Y.A.

Best of luck!