What is an appropriate starting amount of money you should have available in order to begin building a portfolio, considering that online brokerage firms charge fees for transactions? Is it appropriate to invest something as small as $100 or is that fairly pointless due to brokerage fees? How about $250, $500, $1000, $2000, $5000, $10,000? What would you recommend to a friend as being the least amount (in dollars) to invest and still make it 'worth their time'?
How much money should you start with in order to invest in the stock market?
Nah, sharebuilder.com will accomodate those smaller amounts. Scottrade starts with $500. Oodles you can do with that. Be aware though, there is a real difference between investing (long term) and trading.
As for the part about recommending to a friend, well, I had to steer a friend around the melt-down when he was nuts about Krispy Kreme and the founder of the company was going nuts because it had grown beyond his abilities. My friend came out okay and he used sharebuilder. Another was nuts about Starbucks and used Scottrade (which may be a good idea, for the long term, the current down turn in the market may make it cheap). What companies are you simply crazy about? I used to work for and owned a share or two of Phillips Petroleum (which merged with Conoco and current symbol is COP). Until the Venezuela confiscation, they were doing pretty well, it too might be pretty cheap. The question is, is owning a piece of your interesting company worth more than the interest that money in the bank will earn you? That is investing. Trading, on the other hand, is often a glorified way of saying (trying my best poor impression of Clint Eastwood), "So, do you feel lucky? Do ya?" As commonly practiced, trading is a gamble, but the issue is not whether your company is doing a really good job, but are people really wanting to own those shares, and did you buy them before so they have someone to buy from (you)? It gets complicated sometimes.
Reply:It's depend your money that you have.
In my opinion, you can learn first forex trading (due to it's analysis is almost the same with stock trading). In forex you can start with no money down.
So you can start to invest in stock market with 0usd :)
http://forex-4beginner.bigjump... Report Abuse
Reply:How much to invest really depends on what your investment objectives are.
If you are after short term, monthly income trading, then you will need to work backwards based on your trading ability. If your lowest monthly return is about 20%, (which I do not think so because you sound like a newbie) then you will have to work out how much you need to invest in order for that 20% to meet your monthly income needs.
(one caveat here, please do not start out trading thinking you will definitely make money... sorry, 95% of the traders out there lose money)
If you are after a long term investment strategy by investing a fixed amount of money monthly into an instrument such as the QQQQ, then even $100 a month works out to be pretty significant when you retire.
Again, you will probably not make any money when you first start off because you do not have a proven trading system. I lost about a million dollars before I perfected my trading system and made it all back. Check it out at : http://www.mastersoequity.com
http://www.optiontradingpedia.com
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Reply: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?
Reply:It depends on the commissions you pay, how actively you invest, and if your broker has any 'service' fees (ie requires you to pay simply for having an account open) or minimum holding requirements.
Try Zecco (www.zecco.com) which apparently has no comissions, service fees or minimum account balance requirements (note, read the fine print before you sign up to make sure I'm right about this.)
In general the market goes up 10-12% per year-- paying a 10% comission on a $100 investment is therefore kind of pointless.
If you only have a few hundred dollars try investing in an index mutual fund/exchange traded fund (try IVV, SPY). These allow you to own a little stock in a lot of companies which is much safer than picking one or two stocks. Just buy and hold.
Hope that helps. Good luck!
Oh, and the guy who says you need a million bucks is nuts.
Reply:You can open an account at Scottrade with as little as a $500 deposit, there are no minimum number of transactions (trades) required and no inactivity fees or account maintenance. Scottrade has a flat rate ($7) for most online market and limit equity orders, regardless of your trade frequency, account balance, or the number of shares in a transaction.
However, some other important things to consider are; the reason you're investing (for short term enjoyment or long range goals such as college, a new home, or retirement), the risk associated with the various investments, and then choosing the investment, or mix of investments, that are right for you.
As far as the actual trading transactions themselves, opening a trading account with Scottrade is easy (you can apply online). It is only $7.00/trade for stocks priced over $1 per share, regardless of your trade frequency or the number of shares in a transaction.
You can compare the commissions/fees of several brokerage firms at: http://www.scottrade.com/online_broker_c...
I hope you find this information useful. Please let me know if you have any additional questions. I'd be happy to help.
Scottrade
www.Scottrade.com
1-800-619-7283
Reply:$100.00 USD.
Reply:Previous answer says 100,000? That's ridiculous.
Check out some online brokerage companies like TD Ameritrade or Charles Schwab for their minimum requirement to open an account.
I am guessing it is more like 1,000.
Reply:you have to know why you're investing in the stock markets and what your long range financial plan is to honestly answer this question.
For a swing trader [three to ten day average holding time], I'd estimate the minimum capitalization at $100,000. Of course, this has to make sense in the context of your overall financial plan, so I'd say you need to be worth at least $1 million.
For other traders with different plans, lesser or greater amounts would be appropriate.
GL
Reply:With $18, you could probably buy one share of a microcap index, called PZI, so that's the minimum you need to invest with Zecco. Hopefully, that's not too much? Zecco has revolutionized the small investor as they charge nothing to trade. Thus, I'd fund the account with about $250 and start trading. However, make sure it's a taxable individual mutual fund account and not a retirement account as they charge $30 per year for retirement accounts. Because PZI is speculative, normally you wouldn't invest more than 5% of your investment portfolio in it. VTI, EFA, VGK, and VPL tend to be slightly to moderately less volatile.
Zecco used to have a minimum of $2,500 and they have since gotten rid of that limit. The NASD imposes a $2K minimum on margin accounts. I'd say the minimum was one share of VTI or about $150. You can buy a share of VV for $65, VGK for $72.65, VPL for for $69.55, and EFA for $77.64; that would be an extremely diversified portfolio with a total investment required of around $434.84 (and you can buy one investment at a time).
They charge ZERO commissions and were featured on CNBC. I would give them a try. You might want to buy one share of 5 stocks as well if you think you're an excellent stock picker.
The five stocks I would pick are: ADBE, JCP, OXY, WM, and CAT. GOOG is a great company to own as well at $512 per share.
In any event, you must have a good emergency fund to cover emergencies. That's why I only suggest starting the account with $250. Get used to it, build an E-Fund, and then and only then increase your investment in your Zecco account. Scottrade, Fidelity, and Vanguard are places I want you to fund your RothIRA.
Reply:I'd say invest with what u can afford to lose that way u aren't hurt if things don't go your way
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