A question I get asked quite often is “How much money should I invest in one stock when I’m first starting out?”
As a rule of thumb, the answer is “no more than 5% of your portfolio”.
However, this may not be possible if you’re starting out with an amount such as $500-$1000, as it’s very difficult to put $25-$50 in one stock.
In this scenario you would want to bump up your maximum initial investment to $100 per stock.
I understand that in most cases, this method will enable you to buy only one share of a particular company. But starting out this way will allow to to diversify your bets and add to your positions over time.
Please check out The Stock Market is For Everyone for more tips like this. And please share this blog with someone else today. I’d like all of us to see financial freedom, and it starts with investing that first few hundred dollars.