How can I get into the stock market to invest and how much money do I need to invest.?
A web user asks, I’m not looking to invest much maybe 1,000 -2,000. And what would be better to get one share to start off or more. Please help.
Can you help them out? Post your advice!
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Posted in QnA
The best thing to do first is to learn how to choose a good stock. Find a stock that you wan to hold for a long time. When you invest in stock, you are buying a portion of a business. So make sure you are buying a business that you understand and you are comfortable with. Once you choose a business, open up a brokerage account. Scottrade will allow you to open an online account with $500. Then you can buy as many shares of the stock that you want.
Only invest with money you can afford to lose. If you’re only looking to invest 1-2k, I’m guessing that you don’t have a $10k+ safety net saved up. You need to have at least 6 months worth of living expenses totally liquid (e.g. in a money market account) before you even think about investing in stocks.
That said, your best bet is to keep expenses low by buying index funds. Something like 80%+ of professional stockpickers don’t beat the market averages, so what do you think your chances are?
Remember, the stock market is not like a bank account that just happens to pay more interest. It’s full of professionals who make a living by taking your money.
With only a grand to spend I would suggest to use that to get an education first. Asking around here sounds like a good start. The minimum you should consider is $10k to start. Or in other words, ask yourself, do I have 10k I am willing to lose? I suggest reading one book (to start with) “Liar’s Poker”, by Michael Lewis and second, visit a learning website: http://www.murreymath.com . Good luck.
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