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  • How To Invest With Small Amount Of Money 0 comments
    May 31, 2014 2:14 AM | about stocks: BBRY, BP, ELY, GOOG, GOOGL, SPY

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    The first rule of trade is never to trade with less capital as the more the amount invested, the greater would be expected return. While this may be a good statement for those who have the funds, it may not be indicate possibilities for those who have small amounts. Previously, the presence of a large enough capital was mandatory for opening a brokerage account without which trading would not be permitted. However, things have changed today and you can invest small amounts. Even with as much as hundreds or maybe a few thousands, you can easily set up your investment portfolio. The only effort required in this case is to choose the stocks wisely.

    Consider Investments in DPP's

    Dip's or Direct Purchase Plans are stocks that can be purchased directly from the companies. There's no brokerage account, no middleman, and you work directly with the company that issues the stock. The only obstacle in this option is the lack of availability of Dip's as not every company will offer it and this narrows down your choices to a limited few companies. However, it is easy to find companies that offer Dip's as they are permitted to advertise sale opportunities for their stocks. A good way of going about identifying the availability of DPP's is to check the company's website and browse through the "investor relations" section which should give you a pretty clear idea about the availability of direct stocks. The benefit of a DPP is that no brokerage fee is involved and investors can purchase fractions of shares (Sale of segmented shares is not permitted in the stock market). This makes it really convenient for the average trader, especially those who have small capital reserves.

    Search for Brokers Accepting Small Investments

    This is probably the easiest solution available. Search out brokers that are capable of accepting small investments which would subsequently be used to purchase treatable assets. Account restrictions and fees may be imposed by some of them in return for accepting small investments. Some brokers may also help you to build up automatic investment plans for a small fee, maybe as little as $4. This is a great way to kick-start your trading career when you have small investment capital.

    Fund Organizations Which Offer Low Minimums

    It is often found that organizations with well-known no-load funds have minimum investment requirements that can be as much as $3000 - $4000. Once this amount has been invested, the investors may engage in trading activity. For more people, this amount could be a major obstacle as saving up this much money could take a lot of time, especially for the average person who needs to meet daily / monthly expenses apart from keeping a contingent reserve. And even if you manage to save it, this minimum investment value is for a single fund. Just imagine the amount that would have to be arranged if you were to invest in more than one stock. It is best if you search out organizations that have low minimum investment requisites as these will help you to get a good beginning with low capital.

    A Word of Advice

    If you are still unsure of the possible areas of investment that are compatible with small investment capitals, it is best to go for an Automated Trading System as it would not only manage your investments in a strategic manner, but it would also eliminate risks by ensuring that you get profit from your investments. However, be advised that any loss made by the system would occur only due to the lack of adequate effectiveness of the strategy.

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