How to Buy Stocks on a Budget
When buying stocks on a budget, invest directly with a fund family that has thousands of companies in it and no charges. Spread risks as far as possible with a monthly investment program using advice from a financial planner in this free video on investments.
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Hi, there. I'm Cathy Pareto, the founder of Cathy Pareto and Associates, certified financial planner, here in Miami, Florida. In this clip, we're going to talk about how to buy stocks on a budget. Now, what does that really mean? In my mind, that means how can I acquire some equity exposure if I'm on a budget and have limited funds -- say, maybe 50 dollars or 100 dollars a month? I would probably suggest to you that you not consider necessarily buying individual stocks on a drip...a dividend reinvestment. Instead, if you're on a limited budget and you want as much diversification as you can, I would go directly with the fund family -- something like Vanguard or Fidelity -- and get yourself on a regular monthly dollar cost averaging program, where you're buying, according to your budget, say, 50 dollars worth every month. But buy one mutual fund -- hopefully a no-load mutual fund -- that has thousands of companies in it at once. And again, you're not then subjecting yourself to individual stock or company risk. So if you're on a budget and there's...you know, the dollar only goes so far, and you want to start investing, that's how I might do it. Spread your risks as far as you can through a monthly investment program directly with the mutual fund, which should bypass any transaction fees. So that's a little bit about how to buy stocks on a budget, and this has been Cathy Pareto in Miami, Florida.