they say you should have at least $2500 before you start to invest. but what if you only have $500. (i dont advise anyone to follow the advise posted in the following answers!!!) Hi,
If you have $500 most brokers will not talk to you, but you shouldn't deal with those bloodsuckers anyway.
There is a way to invest in stocks without a broker and if you keep reading I will tell you how.
The method is called DRIPs.
A DRIP is a Dividend Reinvestment Plan. It offers indidual investors, even 13 year old, a cost-effective way to build equity in a stock.
The DRIP is run by a corporation and it allows people to make cash purchases of stock or to reinvest dividends (if any). I have a DRIP program with Goodyear Tire and Rubber, but it ran into problems a few years ago and stopped paying dividends.
You only need one share of stock to become eligible. In some cases it can be purchased directly from the company, but normally needs to be purchased through a broker. You could have your parents open up an brokerage account and purchase the share in your name.
There are no fees or commissions when you reinvest your dividends.
There are lots of companies that do this - over 1000. The company likes them because it's a low cost way to get capital or cash for their business. Because of that companies welcome new investors into their DRIP plans.
What makes DRIP popular is that most of the plans require very small cash outlays even as low as $10, some as low as $5.
Some of the world's largest companies like IBM, AT&T, and McDonald's have DRIPs.
Very wealthy investor like DRIPs because it allows them to bypass the broker's commisssion which lowers the investors cost of investing
Another benefit is known as dollar-cost averaging where a fixed amount is invested on a regular basis. The stock rises and falls with the market, but by investing periodically, the average cost of the shares tends to average out and not be affected by the market swings.
Liquidating or selling your shares can be a problem because brokers want to get a commission for selling and buying stock for investors, but the company will buy them back in some cases.
Dividends are considered income and used to be taxed by the IRS, but a change in the law makes them non-taxable. But if you sell your shares and make a profit you have to pay tax on the profit. There are two types of taxes for profits or capital gains: one is short term and costs more than the other kind of capital gain which is called a long-term capital gain and that occurs when you hold a stock for more than six months.
Goodyear Tire and Rubber's stock symbol is GT, but don't invest in this one because it doesn't pay a dividend yet..
YUM is the symbol for Yum! Brands, Inc and they own Pizza Hut, Taco Bell, and Kentucky Fried Chicken on the New York Stock Exchange (NYSE)
This Web site has a list of DRIPs: http://www.directinvesting.com/
To find DRIPs that pay good dividends, look in Investors Business Daily, Barrons, or the Wall Street Journal. Than look them up in the URL above.
Google this keyword "DRIP lists" for more Web site. Be careful. Some of them charge a fee to sign up.
Kindest Personal Regards,
Walt Brown
Site Build It Certified Webmaster
capecod1@capecod-beaches.com domains i have a few ill sell you nflbeef.com,nflbound.com, todaysnba.com pic 1 500 I would research some small caps , look into there balance sheets and try to spot a trend like being in the red but seeing them getting closer to making a profit. For $500 you could consider placing the money in a fixed term deposit to earn interest. I do agree that $500 is a little too small a sum for stock investments. The brokers' fees (if any) may cost more than that. Besides, there is a minimum number of stocks you need to buy to begin with. Buy $500 worth of SPY, an ETF that tracks the value of the S&P500, or tries too...
It will rise at the broad market rate (no better, no worse), and so you will be assurred a 10-12% annual return...
BTW "they" are wrong.... I began with a www.buyandhold.com account and $65 about 25 years ago, and now I am VERY close to being an $800,000aire! probably "procter & gamble." my parents did that and they wound up multi millioniares! awesome huh? If you only have $500 I would consider not putting it in the stock market, especially if it represents a large portion of your savings. You may want to consider it the foundation of your savings plan and put it in something secure like an insured savings account at a local bank.
If that is not attractive you have to ask yourself what are your objectives. If it is simply a bet then take a look at Yahoo Finance for a stock that has had lots of volatility. Or just go to a casino. A long time ago, I started with less, about $150 if I remember correctly. Unfortunately, $150 then was worth a lot more than $500 today. Our wonderful government at work. You have several options.
1. You can research stocks and pick one that you think might do well. Many investors prefer this method, I too. It is a rewarding experience to buy $500 worth of stock and a year later find that it is now worth $1000 or perhaps even more. Unfortunately, you might also find that it is worth $250 or even less. Happened to me many times.
2. You can invest it in a good mutual fund or an index fund and forget about it. Maybe is 30 years that $500 will have grown into $10,000. It does happen. I fact it is not uncommon. I would have been far better off if I had done that with my first $150 investment. Heck I did not even know about mutual funds back then. And there were no such thing as index funds. In fact back then there was only 3 ideces. Dow Jones Industrials, Rails, and Utilities. Now there are hundreds.
OK. Now to answer your question. My favorites at the moment are CHL and GRMN. I have been buying the later like mad. Already own plenty of the former. Open an account with tradeking.com, pay $5 for the commission to buy as many shares as possible on ANARF. This one will deliver the return you never dream about.
Please do your DD on this one before investing. The CEO of this co has been done TWICE to turn a $30 million co to more $1 billion.
P.S. I own 30% in my portfolio and will cash "some" out after 200% return (in 12 months) MTTG, AGGX, NHCT DIA. Buy a emerging market mutual fund and hold it |
