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Michael F.
Michael F.
Melbourne, VIC
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How much is a recommended/standard amount to enter the stock market? The shares I'm looking at are $9, would an initial $1000 investment be reasonable or is that too small? Is buying a lump some better or buying smaller amounts more frequently? Thank you.

8 years ago

Responses

Hi Michael,
It is potentially better to buy a larger chunk with each trade as you will pay between $10 and $30 per trade in brokerage. If you buy the minimum amount ($500) your brokerage cost can be as high as 6% which puts your return back before you start.
At the same time, spreading risk across stocks or industries will reduce the volatility of your portfolio.
I would recommend you speak with a financial planner and look at a couple of index linked funds that are tailored to growth, balanced or stable risk profiles depending on your appetite with experts doing the picking for you.
Good luck
Scott

Hi Michael,

I think it depends on what you're trying to achieve. You definitely must consider cost when investing, especially brokerage when buying shares.

In saying that, I have plenty of clients who simply want to get started. I often start them off with $1,000 as this helps them learn about share trading and get an understanding of what's involved.

My advice, start small and don't be greedy!

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