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How to Invest Your First 100$ in the Stock Market

Jul 31, 2008
Making money by investing in the stock market requires great discipline, patience, and a cold reasoning power. When you are investing money in the stock market, your personal feelings (other than the desire to make more money) don't matter. You cannot be skittish, nor can you hold on to something with any personal attachment when you sense that you need to sell.

You should also concentrate your energies on just one stock sector (such as metals or energy) to help give you mental clarity.

Some people don't have $1000 to open a usual stock brokerage account, and they wonder how they can make money in the stock market beginning with just $100.

There are not very many stock market investment accounts that can be opened for just $100. However, there is at least one very good investment account offered by the highly respected financial institution ING. With ING Direct's Share Builder account, you can open a stock market investing account with as little as, yes, $100, and begin trading immediately. You can buy stocks for as little as $4 and set up your Share Builder account to automatically buy and sell or a regularly scheduled basis.

If you open up an account like Share Builder, you want to have a plan in place for how you are going to invest the money. If you are a beginner, you should probably invest in a company that's listed on the Dow Jones Industrial Average, the NASDAQ, or the S&P 500. These companies are considered to be pretty stable, established, and doing well. The three different indices represent three different groups in which stocks are listed according to different criteria.

Another thing to keep abreast of is which industries on the whole are doing well. You can then pick a stock market investment based on stock quotes for a company in that industry. For instance, if oil and gas companies are doing well, why not choose an oil company to invest in?

However, you also need to keep in mind that if you're beginning with just $100 to invest, you won't be able to buy that many shares of a lot of established companies--their share prices can be very high (higher than $100 for just one share).

One way around this obstacle is to invest in "penny stocks". These are stocks of companies whose shares are only selling for a couple of bucks (so it's actually more than just a penny but the principle's the same). Penny stocks can have great upward potential and make you a lot of money when they start to rise. If you buy penny stocks for, say, $3 a share, when their share price gets up to about $15 it's a good time to sell and take profits.

But don't just pick any penny stock because it's cheap. Again, pick a penny stock to buy and trade in from an industry, such as oil, that is going great guns (read the financial news). And watch it carefully. If you buy penny stocks at $3 a share and they go down to a buck a share, sell them and cut your losses. You haven't lost that much money because you did not invest that much--another great penny stock investment advantage.

When you become more experienced as an investor you can buy options contracts often for $100 or less. Each options contract lets you have temporary control of 100 shares of a given stock. This has the potential to make you a ton of money in a very short time with only a very small investment. But you need to know what you're doing first because you can lose lots of money fast here if you don't.

Arkaitz Arteaga http://www.marketstock.net
About the Author
I have a degree in Computer Systems Engineering. I've been working in the world of forex trading and stock market investing.
I also have been building a variety of websites for the last 3 years.

For more information about Stock Market visit Stock Market - MarketStock.net

For more information about Forex visit Forex - MarketStock.net
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