How much do I invest?


J

jm

If I only have about five hundred dollars, is it better if I don't fool with
the stock market? From what I can tell, I would need about ten-thousand
dollars for it to even matter.

Thanks
 
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J

John A. Weeks III

jm said:
If I only have about five hundred dollars, is it better if I don't fool with
the stock market? From what I can tell, I would need about ten-thousand
dollars for it to even matter.
It depends on your age, financial position, goals, and a zillion
other variables, but if you are young enough to still be able to
type, then you most likely need to have some exposure to the
equity markets to avoid outliving your money. You don't have to
buy individual stocks to get involved with the stock market. You
can use mutual funds that own stocks, you can buy unit trusts that
own baskets of stocks, or you can buy exchange traded funds that
are based on all kinds of indexes and other investing ideas.

If you have this small amount of money on a one-time basis, look
for companies that sell stocks directly to investors. Many major
companies do this. They often do it with no commission, no need
for a broker, and often at a discount to the market. Do a google
search for "DRIPs", or divident reinvestment plans. You most
likely want one that doesn't require you to already be a stock
holder. These are less common, but they are out there.

If you have this $500 on a monthly basis, then look at a no
load mutual fund based on a major index, and set it up as a
"systematic investment" where you buy $500 worth every month.
They can do this by pulling the money right out of your checking
account.

-john-
 
R

Ron Peterson

jm said:
If I only have about five hundred dollars, is it better if I don't fool with
the stock market? From what I can tell, I would need about ten-thousand
dollars for it to even matter.
It would probably be better to pay off your credit card debt. But, I
wouldn't say that there is any minimum amount that you need to invest
in the stock market.

Two stocks that might be suitable for you would be HOOK, a brewer, or
MEAD, an optical instrument maker.
 
R

Richard Cline

Be certain to check the fee structure. Many funds or financial
organizations will require an annual fee just to maintain your account.
This could offset any earning on a small account.

Dick
 
J

jm

Ron Peterson said:
It would probably be better to pay off your credit card debt. But, I
wouldn't say that there is any minimum amount that you need to invest
in the stock market.

Two stocks that might be suitable for you would be HOOK, a brewer, or
MEAD, an optical instrument maker.
Thank you. I like those telescope. Anyway, where does one look to find the
cheap stocks like this? Is there a list of just the "cheaper" ones? Why
did you suggest these two? Did you read about them somewhere? Thank you
again!
 
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R

Ron Peterson

jm said:
Thank you. I like those telescope. Anyway, where does one look to find the
cheap stocks like this? Is there a list of just the "cheaper" ones? Why
did you suggest these two? Did you read about them somewhere? Thank you
again!
I use stock screeners such as yahoo or wallstreetcity. It takes a little
while to get proficient.

A low stock price isn't a good indication of value. I look for a low
price to book ratio and then look for quality products and growing
sales. Earnings are important, but good accountants will try to postpone
earnings to get lower taxes. You will need to learn how to read a
balance sheet and earnings statement.
 

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