10 May 2020
How much would I need to start investing in stocks? How much do I have to invest per stock for it to be worth the commission fees/other charges?
I wouldn't bother too much with commissions because given the competitive nature, the rates are all fairly low (<1% for sure), and it's once-off. When most people talk about "costs eroding returns", they are referring to recurring costs like management fees (one consideration if you're thinking robo-advisors).
If you're going for value-investing, even if you're buying $1000 of one stock, the commission you are going to get charged is maybe $10. But if you're doing your research, and investing in right companies, you should be doing 15% p.a. returns, so that initial once-off cost of 1% ($10) is not so critical. I would study the custodian fees since these are charged in perpetuity.
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Given the constantly dropping commission fees (U.S. already 0.00 USD reached for stocks and ETFs, f.ex. TD Ameritrade or Charles Schwab, no advertising from my part, I am only a very happy TD A customer), the absolute investing amount has almost no importance anymore. Perfect conditions for beginner retail investors, you could clearly experiment to find out what works.
my private strategy to successful equity investing is here, try to consider passive ETFs instead of single stock investing:
Dr. Wealth has covered this question before, let's read it from the expert:
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