Comments on: Investing a Small Amount http://thefinancebuff.com/2006/12/investing-small-amount.html like a friend telling you about money ... Thu, 19 Nov 2009 19:44:17 -0600 http://wordpress.org/?v=2.8 hourly 1 By: TFB http://thefinancebuff.com/2006/12/investing-small-amount.html/comment-page-1#comment-36 TFB Tue, 16 Jan 2007 16:24:00 +0000 http://blog.thefinancebuff.com/?p=43#comment-36 My argument against buying individual stocks is the lack of diversification. It makes no sense to buy individual stocks when you can buy inexpensive mutual funds which hold hundreds or thousands of stocks in one place. I refer you to this great article on The Money Tortoise:<br/><br/><a HREF="http://www.moneytortoise.com/diversifying-risk-vs-stock-picking/" REL="nofollow">Diversifying Risk vs. Stock Picking</a> My argument against buying individual stocks is the lack of diversification. It makes no sense to buy individual stocks when you can buy inexpensive mutual funds which hold hundreds or thousands of stocks in one place. I refer you to this great article on The Money Tortoise:

Diversifying Risk vs. Stock Picking

]]> By: TJP http://thefinancebuff.com/2006/12/investing-small-amount.html/comment-page-1#comment-29 TJP Fri, 22 Dec 2006 07:06:00 +0000 http://blog.thefinancebuff.com/?p=43#comment-29 I disagree with your claim on lesson #2. <br/><br/>I'll admit this guy is way off when it comes to ETF trading, but his commentary on investing small amounts of money in stocks is right on target.<br/><br/>It's a great way to build a substantial portfolio over time. <br/><br/>Your 401(k) is your investment portfolio for the long-term, a time horizon of over 30 years for some people. Everyone should have money in stocks to invest for shorter time frames like 10+ years as well.<br/><br/>If you limit selling, the commission fees on even a $500 account can be kept at bay. <br/><br/>I believe in buying stocks that you can hold for some time. You'll gain the return on investment, and with ShareBuilder, you won't be charged inactivity fees or annual account fees.<br/><br/>Simply buy the shares and let them sit and collect dividends and value. I disagree with your claim on lesson #2.

I'll admit this guy is way off when it comes to ETF trading, but his commentary on investing small amounts of money in stocks is right on target.

It's a great way to build a substantial portfolio over time.

Your 401(k) is your investment portfolio for the long-term, a time horizon of over 30 years for some people. Everyone should have money in stocks to invest for shorter time frames like 10+ years as well.

If you limit selling, the commission fees on even a $500 account can be kept at bay.

I believe in buying stocks that you can hold for some time. You'll gain the return on investment, and with ShareBuilder, you won't be charged inactivity fees or annual account fees.

Simply buy the shares and let them sit and collect dividends and value.

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