If your a novice, and only have 20 to 50 dollars to invest each month, what should you do with it?

Question

I'm a novice when it comes to investing. The stock market seems like a wise move as long as I plan to keep my money in it for a long time, as in decades of waiting. So, I have around 20 to 50 dollars to spare each week in investing in the stocket market or any other financial institution. What should I do? Go with with one the popular online traders like E-Trade? Study the WSJ for a few weeks? What type of stocks are the best for long term investments? I know you need a few hundred dollars to start up in the stock market, but I'm trying to figure out is the strategy I should imploy when it's setup. Remember, I'm on a budget. And no, I do not have the ability of a 401k or employer investing. I'm self-employed and have to figure out things for myself on this matter.

Answer 1

Lots of banks have mutual funds you can link to your checking account.  It will automatically withdraw a set amount every month.  Takes very little maintenance and you don't usually need a minimum investment amount.

Answer 2

I would put them into the IRA account.  

Answer 3

I recommend an online brokerage firm that has good beginner qualitys {like tutorials or an easy to understand set up}, i use zecco, better then schwab, etrade, etc. they are the only ones with free stock trades, no minumums..all the others will charge you fees for trading, but compare and see for yourself. Good luck and happy investing!

http://friends.zecco.com/r/a7a2877caab81...

Answer 4

An IRA is a good idea.  But you need to know that IRAs are shell accounts, meaning after you establish one you will need to invest the money you put into it.

Also, you will want to build up the amount you have to invest before actually making a trade.  Each time you make a trade the brokerage firm you us will charge you a fee.  So, each time you build up about 500-1000 dollars in your account then purchase multiple shares with one trade to cut down on the amount of fees you pay.

One more thing, you might want to invest the money in well diversified Mutual Funds if you are not that familiar with the stock market.  This will help keep your risk low, and hopefully if you choose the right one, give you consistent returns.

Answer 5

The best long term investments are those who deal in products that people will be purchasing even when times are hard.

Examples are: paper products, such as Zellerbach, foods such as Dole or Van de Camp. etc.

It is fun to try to figure out which items are those that people will continue to buy say in a recession or depression.

You really limit yourself with the $50 maximum because you can't really buy one complete share of anything.  You have to deposit the cash into a stock account until you have enough to buy something.  In the meantime, you will be paying a charge that will wipe out any interest you draw.

It is said that the best time to begin investing in the market is when you can afford to.  When you have at least what it takes to support yourself for a year put away in the bank in the event you lose your income, and when you have already maxed out your IRAs.