How much money do I need to buy stocks?

This is a common question for those who want to get involved in stock investing.

It is most common to buy what is called a “round lot,” which is 100 shares.  Most stocks worth buying will cost at least $15 per share, so that means about $1500 is needed.  Having $2000-$3000 would be better since it would allow for one to select from a greater pool of stocks.

Note that less than 100 shares can be bought, but as fewer shares are purchased the percentage paid to the broker increases.  Also, if one only has 10 shares of stock, even if the stock goes up $10 one only makes $100, which is hardly worth the effort.

While 100 shares is that starting point, one should also work to build up a portfolio by buying regularly.  A good strategy would be to get in the habit of saving a few hundred dollars each month.  Each time one has enough saved, the money would be invested, buying another 100 shares of a stock.  While it will take time, over several years a large portfolio can be built this way.  The secret is to invest consistently.

Comments appreciated! What are your thoughts? Questions?

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