Minimum amount needed to buy stocks

I suggest opening an account with Charles Schwab and start a monthly investment plan with the amount that you can afford. They have low cost investment options.

The most important thing is to take action and get it set up. It will be fun to watch it grow and you can increase your contributions as your income rises.

I think it's great that you are thinking about investing even if you don't have a lot of money to invest. To answer your question, no, there aren't a minimum number of shares that you need to buy.

If you wanted to buy one share of a stock, you could do that. A few things to consider before jumping in;.

Before I recommend that anybody start investing, I also recommend that they have first dealt with all their risks.

After those risks are covered, jump into investing! With little money to invest at first, I would consider starting with a mutual fund or ETF.

This will give you instant diversification.

One of the largest ETFs out there, SPY, will allow you to diversify your investment across different companies. There are some companies trying to make the financial services industry easier and more cost efficient for customers to use. They have no account minimums to open an account. It is designed as an easy way to get started with investing. Your portfolio will be more volatile, but you could easily make more money in the long run. If you chose this approach, I would stick with the best, strongest companies in the world.

How much $$$ do you need to start investing? - May. 13,

Alternatively, you could invest in an Exchange Traded Fund ETF and get immediate diversification with one trade. This way, you could broad index exposure with just one or two trades. ETFs are like conventional mutual funds in that you get a basket of stocks at once, but like a stock, trade during the day.

Lastly, you could invest in a conventional mutual fund. These only trade at the end of the day and you receive the Net Asset Value, or NAV. This is where they add up all of the stocks within the fund by weight to determine the NAV value.

But like an ETF, would provide diversification immediately. In IRAs, the minimums are usually lower. And some funds do have lower minimums.

The short answer is "no" - you can buy a single share of any publicly traded company if you want to.

Thus, if you have a small amount of money to invest, you can, in fact, buy a small number of shares of a public company. Most brokers will process a trade for a few shares of common stock , as they receive a commission for their services anyway.

However, just because you can invest your savings this way, does not mean that such an investment will be a good one. You have two major obstacles which must be mitigated before going ahead and buying a small number of common shares: First, you need to strongly consider the costs of under-diversification if you are going to begin your investment portfolio with a single stock.

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If you have no other investments, investing in only one company exposes you to an excessive amount of company-specific risk i. Thus, if you have a small amount of money to invest, a much more efficient portfolio can be constructed by buying into a mutual fund. A mutual fund is essentially a large basket of investments bundled together, and will provide growth opportunities for a reasonably low amount of risk.

For further reading, see The Importance Of Diversification and Portfolio Protection In Diversification And Discipline. Second, even if you can stomach the risks of under-diversification, your next hurdle is a high one: To learn more, see Don't Let Brokerage Fees Undermine Your Returns.

When combined, transaction costs and the risk of under-diversification usually prove to be too costly for those who only have a small amount of money to invest. Therefore, rather than purchasing a few shares of a public company, buying mutual funds is often a much better option.

To learn more, read Mutual Fund Basics Tutorial and The Advantages Of Mutual Funds. Dictionary Term Of The Day. A measure of what it costs an investment company to operate a mutual fund.

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Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. Most Helpful Most Recent. Rylance, Mark Newport Beach, CA. Free Consultation Was this answer helpful? Michels, Kevin Draper, UT. A few things to consider before jumping in; Before I recommend that anybody start investing, I also recommend that they have first dealt with all their risks. Marshall, Andrew Carlsbad, CA.

Stewart, Dan Dallas, TX. Investopedia New York, NY. Investopedia does not provide tax, investment, or financial services. The information is not meant to be, and should not be construed as advice or used for investment purposes. While Investopedia may edit questions provided by users for grammar, punctuation, profanity, and question title length, Investopedia is not involved in the questions and answers between advisors and users, does not endorse any particular financial advisor that provides answers via the service, and is not responsible for any claims made by any advisor.

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