Good to start with this amount or wait?

**jIM_Ohio** · 03-13-2009, 05:57 AM

You'd be better off (expense and profit wise) to use mutual funds until you can invest close to $500-$1000 per month (per transaction).

**creditoria** · 03-13-2009, 06:06 AM

Two of my friends started recently but their investment was higher. One of them started with $8000 while the other said he prefer round numbers

and invested $10000.

I am not sure how they spend their money but they are both making $500- $1200 a month out of those investments.

**Broken Arrow** · 03-13-2009, 06:16 AM

Although I trade stocks myself, I do sometimes wonder if I may have inadvertently helped fan its allure without emphasizing enough of its dangers?

I agree about swinging with no less than $1000 at a time. Preferably more. Depends on your strategy.

**Crombo25** · 03-13-2009, 11:03 AM

Hey new here too and looking to get into stock investing.

* Hoping I'm not hijacking this thread *

Out of curiosity, why wouldn't you go in with less than $1000 at a time? Is it not worth buying at $400, $500 or $600 a month? I would be looking to buy for long term holding (3-5 years). So say I was putting in $500 a month. Should I just do one buy every two months?

Thanks much!

**snafu** · 03-13-2009, 11:40 AM

If you want to Gamble, it's more fun to go to a Casino. Typically people Investing $300. - $1,000. per month in 'stock' are buying a Mutual Fund [MF] using a dollar cost averaging system [DCA].

The stock market can be profitable but it can also lose your money in an instant. You need to evaluate your Risk tolerance. It's important to learn about the stock market/bond market it before throwing money at it. If you cannot commit the money for a minimum of 5 years, it makes more sense to create a savings plan.

**disneysteve** · 03-13-2009, 12:17 PM

Originally posted by Crombo25 View Post

Out of curiosity, why wouldn't you go in with less than $1000 at a time?

Every time you buy an individual stock, you pay a commission. The amount of the commission will vary depending on the broker you use. Personally, I use Scottrade and pay $7/trade. If you invest $1,000, that amounts to a 0.7% fee. If, however, you only invest $300, that $7 fee is now 2.3%. It makes it a lot harder to come out ahead when you lose 2.3% up front. It is the same reason why we all recommend no-load mutual funds, not load funds that charge 5% up front.

And don't forget that you pay that commission again when you sell the stock.

**kork13** · 03-13-2009, 12:52 PM

I'll just chime in along with Jim and Steve.... Particularly for someone just starting into investing, who is unknowledgable about it and doesn't have substantial funds to back it, MUTUAL FUNDS are definitely the way to go. In the end, you pay much less in fees, and you also mitigate your risks by buying a slew of different companies all at once. Over time, you can continue to learn about trading and the stock market, and once you have the available funds to make larger transactions, sure--jump into individual stocks. But until then, stick to low-expense mutual funds.

**disneysteve** · 03-13-2009, 01:01 PM

In the interest of full disclosure, I will admit that my very first investment was buying 3 shares of Walt Disney stock. That was nearly 20 years ago and I still own those shares.

**Crombo25** · 03-13-2009, 01:34 PM

Wow thanks for the info all.

Yes me jumping into the stock market is certainly not for retirement. I already max out 401k, put 10% of salary into ESPP, and save 22% of net income each month (savings accounts). The $500 or so extra a month was to see if I can learn the stock market and start investing in that route. I have a tolerance for risk.

So it sounds like the recommendation is to check out no load or low-expense MFs?

Thanks for the advice!

**KTP** · 03-14-2009, 06:18 AM

You might look into wells fargo investments. I set up a brokerage account with them because they offered 100 free trades for the first year.

Good to start with this amount or wait?