How to Buy Small Amounts of Stock

Buy a small amount of stocks each month.

The traditional stock order is for multiples of 100 shares, called round lots. If you want to buy a round lot of a $50 stock, the cost will be $5,000 plus commission. Online brokers will allow you to buy and sell less than round lot amounts, but commissions become a significant factor. There is one brokerage company that allows regular investment of small amounts of money into stocks or ETFs.

Instructions

1. Open an account with the Sharebuilder program from ING Direct. The home page is linked below. The Open an Account link is at the top of the page. The application is for a regular brokerage account and allows regular stock trading.

2. Select the Free Trial Options for the automatic investing plan. The free trial gives two months with no charge of the $12 cost per month automatic investment plan.

3. Set up automatic investments of the stock or stocks you want to buy. The Sharebuilder program allows you to set the dollar amount of each investment and whether it will be monthly, twice-a-month or weekly. The $12-per-month plan allows up to six investments per month.

4. Complete the form to link your stock account with a bank checking or savings account. Your regularly scheduled investments will be automatically withdrawn from this account.

Tips & Warnings

• The Sharebuilder program allows you to invest any amount into stocks. The amount for each investment will be fully invested including fractional shares. For a single stock purchase per month, Sharebuilder charges $4. Sharebuilder allows regular, one-time stock trades for a $9.95 commission.

• The $2 or $4 per share cost of Sharebuilder will be a significant percentage of the amount invested for smaller regular investments. This program will work best for long-term holding of the purchased stocks. Stock investments are subject to market risk and you can lose money. Do your own research before investing in any stock.

References

• Sharebuilder: How Sharebuilder Works

Resources

• Sharebuilder: Home Page