Can someone who has only $200 to invest n stocks really invest that little and make a few hundred from it?

Question

or are stocks mainly for bigger investors in the thousands of shares? I saw a few shares that are supposed to do well this year and I could buy like 20 of them with the $200 but can someone really make more money off that then off a savings account?

Answer 1

Actually, the answer to your main question is yes, if you're willing to wait long enough.

You can enrol in a DRIP ($50) and then invest $150 in the cmopany, sit back and collect dividends for the rest of your life.  You can add more and get more dividends.  No commission charges for some of these.  So all your money goes working for you.  I've invested in over 25 or so companies and never invested more than $500 at a time this way....

MoneyEnergy

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Answer 2

No.With this small amount is is best perhaps to buy a few options that have great leverage and earn more than your investment but only if you know what you are doing and it is ok with your risk management.With this small amount you cannot make money at all.Be realistic.

Answer 3

Invest in your community such as your church events ...Invest in your future and the rest will happen..

Answer 4

You can do 200, but there's no guarentee in stocks. It's a good investment, but not guarenteed. A lot of people have been losing loads lately, so invest wisely.

Answer 5

View It Now    FinanceExtends (dot) com

Answer 6

Hold on Tex...that's alot of questions.

As for your main question the answer is yes and no.  In theory you can invest $200 and make a few hundred from it but it isn't very likely.  The problem you have with limited funds is that you can't realistically buy into more than one company.  In other words you can't diversify which makes your investment much more risky since whatever stock you do buy could do well or the CEO could turn out to be a crook and it could tank first thing Monday morning.

Another problem with only having $200 is that the commission fees are eating-up all your profits.  If the fee is $15 for the purchase and the same for the sale, your stock will have to increase by 15% before you even make a penny.  Rule of thumb is that you don't want your commission to be more than 1-2% of the value of your investment (5% at the most) unless you plan to hold the stock for a VERY long time.  You could get a better price from somebody like Scottrade...there are others.

As for putting it on the market or in a bank account you have to consider what you want out of the money.  If this is money you'll need acess to in the next year then it's probably not worth the risk and commissions.  If this investment is for the long term then the market is a better bet.  However, you probaly want to do some more research and look into no-load or very low load mutual funds.  There are also some set-up for situations just like yours that allow people to essentially buy fractions of a stock.  In either case it allows for diversification of your investment with limited funds.  The returns on these typically meet or sometimes beat the market (at least the good ones do) and they're a little safer for your situation.

Lastly, as to your question about it being risky to invest $1000 the answer is yes but it's just as risky to invest your $200.  It's all about risk management.  If it's money you can afford to lose than you can be more aggressive with your investment.  If not, then you need to be more conservative with your choices.  Every person has to reach their own comfort level.  Also, you need to consider that it's all a percentage return on stocks.  So a 10% return on a $1000 nets you $100  while your $200 will net you $20.  The more you have in the market the more you can afford to diversify into some risky and some stable, steady growth stocks.

Answer 7

With that little money, the commisions to buy the stocks will probably be more than your gains.

You need more money.