Best thing to do with small amounts of cash

Discussion in 'Stock Market Forum' started by Penny, Jul 14, 2015.

  1. Penny

    Penny Well-Known Member

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    Hi all,

    I have various low-level income sources that direct deposit into my brokerage account. So I get maybe $5 at a time. I was wondering if there was anything better to do with this money than just let it sit there until I have enough to buy a stock or fund that I want (normally between $60 and $150).

    It is a Fidelity account so maybe there are some smaller no-fee iShares or similar funds I could consider that are cheap but not worthless? Then the money would still be working for me while I waited for it to grow?

    I suspect I should just cultivate some self-control, but thought some of you might have a clever idea about how to invest small balances.
     
  2. baudwalk

    baudwalk Senior Investor

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    I would talk to Fidelity first, and see what they might have to offer and suggest within their offerings. If you have a storefront near you make an appointment and have a talk with a representative. HTH.
     
  3. petesede

    petesede Guest

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    Mutual funds. Fidelity has a ton of mutual funds that you can buy into with less than $20 at no cost. My opinion, you should never buy stocks unless you are doing it with $1000 or more at a time, the commissions just make it nearly impossible to buy and sell and make money. In your case, I would ride a mutual fund until I had $2000 in it, then find a stock to buy... and then start over with your mutual fund until you once again have $2000.

    Also, don´t underestimate the potential for mutual funds, especially if you go into one of the more targeted ones at the right time.
     
  4. crimsonghost747

    crimsonghost747 Senior Investor

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    With these amounts we are definitely talking about something with no commission fees. Get in touch with your broker and ask to get a list of all the products they offer with no commission, then start making your research on those. But anything with a commission is a no go with such small amounts.
     
  5. Penny

    Penny Well-Known Member

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    Hi petesede--I generally find mutual funds have an even higher buy in cost than the ETFs I normally go with. Do you have any suggestions for mutual funds with low minimums? I see costs of 20 bucks or so but then they will require a min purchase of at least $500.
     
  6. baudwalk

    baudwalk Senior Investor

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    Penny, did you make an appointment with Fidelity last week as suggested? There are 6 offices in and around Chicago, including 2 in the city itself. http://www.fidelity.com/branchlocator/ Given you already have some kind of account(s) there already, it seems to me a sit down would be most logical.
     
  7. Sunflogun

    Sunflogun Well-Known Member

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    The money I earn extra at the moment I am just putting it aside for a rainy day. If I reach a decent amount I might just start investing, but as for now I don't think I have enough to justify that action.
     
  8. pwarbi

    pwarbi Senior Investor

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    I think a lot depends on how regular your making these small amounts. While on their own it might not be worth investing or moving into a separate account, if you manage to leave these small amounts alone, they'll eventually add up, then it will be worth looking at what to do with the money.
     
  9. Penny

    Penny Well-Known Member

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    Baud walk, I talk to my Fidelity rep twice a year, most recently about a month ago. They do not give advice on specific stocks or funds unless you buy that service. They did green light my overall investing strategy but we're pretty useless beyond that.

    The free office visit at the big F is fine to ensure you are not making any stupid mistakes, it is utterly useless for strategic micro-decisions like this one. In fact I sometimes think either they are panicked about liability, or the staff who take these appointments actually don't know much about investing beyond pushing Fidelity's latest product.
     
  10. baudwalk

    baudwalk Senior Investor

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    I can tell you with certainty that Fidelity, because of its fiduciary responsibilities in their huge corporate IRA and pension program business, deliberately avoids conflict of interest specific investment advice such as you see advertised by the likes of Schwab, eTrade, Scottrade et al. My suggestion was predicated on, but not limited to their, just say, no load funds https://www.fidelity.com/mutual-funds/all-mutual-funds/overview or ETFs https://www.fidelity.com/etfs/overview that may have low dollar entry requirements given that you are already a customer. Perhaps you may find what you seek by calling that 800-343-3548 number. But you clearly have to do whatever you feel comfortable with. Information gathering and exploring alternatives doesn't cost anything except a bit of time. HTH. YMMV.
     
    Last edited: Jul 20, 2015

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