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Is it possible to invest as little as $20 in the stock market?

  1. sweetzara profile image78
    sweetzaraposted 5 years ago

    Is it possible to invest as little as $20 in the stock market?

    How does one invest a small amount regularly in the US stock market? What is the best way to do this?

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  2. PickingProfits profile image75
    PickingProfitsposted 5 years ago

    If all you want to invest is $20 then buy some 90% silver coins. You'll be glad you did. Don't take this as investment advice though. But really, that is an investment that can be as cheap or as expensive as you want it to be.

    1. sweetzara profile image78
      sweetzaraposted 5 years agoin reply to this

      I should have clarified. I meant is it possible to invest as little at $20 at a time, perhaps weekly or monthly for a long period of time.

  3. My Esoteric profile image91
    My Esotericposted 5 years ago

    Yes there is, probably several vehicles, but one is the DRIP ... Dividend Reinvestment Program ... many companies have.  You find a stock you like that has one one of these programs (Google it probably) and sign up for it.  Some may have an initial deposit to buy 1 share of its stock, but after that, you can send in what you want, whenever you want.  These are all dividend paying stocks so when dividends are paid, they are automatically reinvested.

    Most company's, like H&R Block, and no fee or commission; others, like IBM, do (I am not recommending them, they are the last two I still have as I have changed the method I invest).  I would pick the ones that don't charge commission.

    I don't know if there are any good mutual funds that let you invest that little, but there may be.  ING Direct Bank has a "Sharebuilder" plan that may fit your needs, although in looking them up, I noticed they got popped for a $600 million fine for transactions involving Iran.

  4. TMHughes profile image93
    TMHughesposted 5 years ago

    Answers to the questions "Can you invest in stocks with $20" and "saving vs investing, which is better". read more

  5. LandmarkWealth profile image79
    LandmarkWealthposted 5 years ago

    You can buy a single stock if the cost of 1 share is less the $20 minus commissions.  That is less practical.  From a diversity stand point with small amount of money you'll be better off with a mutual fund.  The problem is most funds are set to a minimum investment of $1000-$2500.  So to get exposure to the more broad markets, you'd be better off buying an ETF.  There are numerous ETF's in the market.  But you can buy something as simple as the I-shares growth index, which will give you exposure to a diversified growth portfolio of stocks and bonds. (Symbol "AOR") It trades closer to $30.00 per share, but you can see how you can particpate with a small dollar value.  That is not a specific recommendation, but just an example since I don't know enough about you.

  6. howardyoung profile image71
    howardyoungposted 5 years ago

    You can, but the brokerage fees would eat up half of your investment.   As a alternative, you can look into DRIPS where you invest directly with a company.  They hold your stock on their books and reinvest dividends by purchasing additional shares.

  7. Bretsuki profile image78
    Bretsukiposted 5 years ago

    Yes you can, but making such a small investment is impractical as brokerage fees, which must be paid when you buy and sell will take up all your investment.

    One way to invest a small amount is to save your $20 to a bank savings account or sharebuilder.com will allow you topayy a small amount into a brokerage account.

    When you have saved an amount that you are happy with you can buy a stock. sharebuilder do a $4 automatic trade on Tuesdays, the risk here is you don't know the share price until after you have bought. Normal market trading is available at $9.95 per trade and can be ordered with price limits and such.

    Many companies such as T Rowe Price allow you to invest a regular amount, minimum $100 in accounts but you need $2,500 to open the account.

    My advice would be to save up yourr $20 so you can buy stocks in your chosen companies or funds in large enough quantities to offset brokerage fees and also consider dividend reinvestment plans (DRIP) to increase your holding after purchase.

  8. simpelandcheap profile image59
    simpelandcheapposted 5 years ago

    Can you Invest 20 a month? Yes you can. Is it the best method? No, but it's better then nothing. That's how I started investing. I opened a Roth account with zecco and the rest was as you say history

    1. My Esoteric profile image91
      My Esotericposted 5 years agoin reply to this

      Great point, definitely if you can find a way of doing this inside a Roth IRA, that is very much to your advantage.

  9. bankscottage profile image95
    bankscottageposted 5 years ago

    As many have pointed out, yes, you can invest $20 per month but the fees and commissions could cost far too much.
    As TMHughes points out in his Hub, DRIPS and Sharebuilder are options for investing small amounts on a regular (or even irregular) basis.
    Sharebuilder (now part of CapitalOne) has a basic program that is free, but the cost to invest is $4 per trade when done through their investing plan.  They only purchase stock in the plan on Tuesdays.  Pick the stock you want to invest in.  You can deposit money into a linked savings account by Monday.  The plan will purchase the stock sometime on Tuesday.  You can set this up for regular investments (weekly, monthly), or only when you want to purchase a stock.  Everytime you purchase a stock through the plan, you will pay $4.  One option would put $20 each month into the savings portion of the account and then once a year you could purchase a stock ($240) and the fee would only be $4.  In addition to a regular account, you could open an IRA or Roth IRA.  Sharebuilder gives you a lot of options to get started when you don't have much to invest.  You can check out the website: https://www.sharebuilder.com/
    If you would like to open a DRIPS account check out Computershare (https://www-us.computershare.com/investor)  You may have to purchase a full share of a company's stock before you start investing $20/month.
    Either of these methods do not let you time your purchases like you could with a regular stock order in a brokerage account.  Basically you are dollar cost averaging, purchase regularly and the stock highs and stock lows will work out.

  10. safiq ali patel profile image74
    safiq ali patelposted 5 years ago

    Do a Google search you will find there are plenty of websites that will show you how to invest in the stock market with just $20. If you had bought shares for $20 dollars when the markets crashed in recovery that figure could have gone up by three to four times depending on which company or corporation you'd invested in.

  11. Jason Matthews profile image91
    Jason Matthewsposted 4 years ago

    Is may be possible, and as others have mentioned, there are ways to do this, but I would not recommend it. Too much of your $20 would likely be taken in brokerage or trading fees. Instead, I would recommend saving your $20 until you have around $200-300 and then use that to buy shares. I think you will find that the percentage of money taken out for fees will be less using this method than trying to invest $20 at one time. Just my two cents...

  12. David Trujillo profile image87
    David Trujilloposted 2 years ago

    No idea on the stock market, but on Forex you can invest down to $5 dollars with a Micro Account and micro lots of .01.

    Great for practice and with time you can grow it.

 
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