If you have limited resources, there are several ways to invest small amounts of money online. Even better, many feature low transaction costs, so more of your money goes into the investment itself. Remember that for earning profit there is no magical pill , its all about good observatio n and analysis.
Develop an investment strategy.
When you want to invest small amounts of money this can be fairly simple. If you are mainly interested in equity growth, you probably will concentrate on stocks. If generating some income or minimizing risk is your priority, then mutual funds may serve you better.
Consider direct stock purchase plans (DSPPs).
Many companies offer DSPPs that allow you to invest in their stock through a transfer agent for a month with automatic debiting from a bank account. Transactions are low, for purchases. A DSPP is normally the least expensive way to buy the stock. However, sales fees are usually higher and the account is limited to the company’s stock. A DSPP is good for investing long term, but it’s probably not appropriate if you plan to trade stocks on a short-term basis.
Check out no-load mutual funds with low minimum investment requirements.
Some mutual funds have initial investment requirements . If you are willing to set the fund up as an IRA, many premium funds will waive most of their initial investment requirement . You can purchase mutual fund shares online directly from most mutual fund companies or through brokers.
Choose an online discount broker for trading individual stocks and other securities.
For example, sharebuilder.com offers an online account with no minimum investment or activity requirement and transaction fees starting at $4 a trade.
Open your account online
once you’ve chosen the investment strategy and provider that best fits your needs. You can set up an account online in a few minutes by providing your personal contact information, Social Security number and employer, along with your bank account information. With many DSPPs and other providers, you will need to download, complete and mail a paper form, but everything else is done online.