US Stocks Entry Level Questions - What is the minimum US stocks like Amazon shares that I can buy? - Seedly

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Asked by 罗智力

Asked 2w ago

US Stocks Entry Level Questions - What is the minimum US stocks like Amazon shares that I can buy?

How does long term stocks works? if I'm looking to buy and hold it for long term (30 years), from time to time, if share prices drop below buy-in price, do I need to have extra cash to withstand it? Does it work like day trading? Will it start to deduct money from my accounts if the shares fall below buy-in prices? Or is it a 1-time buy-in thing? If I were to buy 50K worth of Amazon shares, I will lose 50K at most if the stock crashes? How does one lose money, buying long term and holding it?

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Xue Yi Hang
Level 2. Rookie
Updated 1w ago

To add on to the other answers, there is a minimum commission paid to the brokerage when you buy and sell, so it is often not worth it to just buy/sell 1 share.

In addition, brokerages actually hold your foreign shares on your behalf so they will also charge a monthly custodian fee (couple of dollars).

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Eric Ong
Eric Ong

1w ago

True. It is not a meaningful amount, for example, 1 share is 20 dollar, and you buy 1 share of 20 dollar, and if your commision is 20 dollar as well. Your company would need to increase to 40 dollar before you breakeven. So, you may take approximate or rule of thumb, like commission should not be more than 1% of your investment. Else you may look for brokerage that charge by per trade basis. In another word, fix brokerage per trade.
Xue Yi Hang

1w ago

Actually taking your example, the company must increase to $60 to break even cos when you sell you must pay commission again lol. Haven't count the custodian fees in between also 😅

Hi,

The minimum you can buy is 1 stock for U.S exchanges. Buying stocks is the same all around the world, you don’t have to have extra money to cover losses, as there will be no “Margin Call” if you buy with 50k in cash. Also I’m going to assume that the 50k is in USD, with that at the current amazon stock price of USD 1784.92, you can only buy 28 shares which is 1784.92 x 28 = USD 49,977.76 (excluding fees), so you will have some money leftover as stocks can only be bought in whole numbers. Also you can only lose the exact amount you have invested unless you buy the shares on margin, which is basically buying shares on borrowed money. Also if you hold it for long term, it will depend on how the stock performs, if the share price goes up, you can make a profit, vice versa. Hope this makes it clearer.

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罗智力
罗智力

1w ago

Hi Shabir, that means i will still have the 28 shares until end of the time, so long i don't sell it right? Meaning to say if i use 50K cash and buy, if the share prices goes down. i will only lose the value /shares within that 50k right?
Eric Ong
Eric Ong

1w ago

Hi Derrick, you are right. You own the 28 shares, as long as the company still exist. As Shabir clearly pointed out, you won't loss more than you invest, unless you trade with margin, in other word, you borrow money to invest. For new investors, it is better not to take any kind of leverage.
H
Henry
Level 2. Rookie
Answered 2w ago

For stocks listed in US exchange, min stock u can buy is 1.

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