Your Questions About How To Invest In The Stock Market With Little Money
1. Your Questions About How To Invest In The Stock Market
With Little Money
Donald asks…
How can a 15 year old with only £100 get started with investing in
the stock market, mutual funds etc.?
I only have £100 from pocket money. I have always been a business-orientated person and I'm
becoming more interested in stocks now. I want to get involved but the only thing is I don't
know how to get started. Plus I have little starting capital. With the little money and
knowledge I have, how can I learn more and get started with investing? Thanks for your time.
Steve Winston answers:
Investing Tutorials - Basics
http://www.investopedia.com/university/buildingblocks.asp#axzz1b0PGJiek
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2. Sandy asks…
College-age students in the stock market?
I know this may sound like an uncommon question, but Im looking for input from someone more
knowledgeable than I. I am a college freshman, 19 years old, working towards a four-year
biology degree with plans for graduate education, most likely medical or pharmaceutical school.
I have a network of extended family that is comfortably retired from the financial industry after
doing considerably well in it. To make a long story somewhat short, they were advising me on
saving for my education over Thanksgiving dinner today. In addition to the savings I have
accumulated in various bank accounts, CD's and bonds, they have advised me to also invest a
minor amount of money in the stock market and establish a portfolio at a young age. I'm a
little apprehensive about this, especially given the volatility of the market today. I told them that
I didn't think investing in stock is appropriate at my age and that I should go for more
conservative options. However, their point was that is important to diversify my savings among
various sources, including stocks.
What do you think about college students getting involved in the market, and how should I go
about doing it (if at all?)
Steve Winston answers:
Your safest bet is a Total Stock Market Index Fund or ETF. These funds literally own every
stock in the market, so when times are good, they go up in value. When times are bad (like
now) they go down, but will regain their value when the economy eventually improves, as it
always does. There's no way their value can go all the way to zero, unless the stock market
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3. somehow ceases to exist, in which case you most likely have worse things to worry about than
your savings
Also, the dividends paid by the stocks in the fund are collected and divided equally among
members, so you will get dividend payments that you can spend or reinvest as you see fit.
It is safer than trying to pick stocks in individual companies, which can permanently lose value
or go out of business all together. It is also cheaper than regular mutual funds, which charge
higher fees.
Ask your family members with history in the finance industry about an index fund or etf that
tracks the entire US stock market and see if they think it is a good choice for you.
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