One of the most common doubts among novice investors is the minimum money necessary to invest in the stock market. This article aims to clarify doubts on this subject and, incidentally, answer a question that has already been asked me in real life and in writing, which may be shared by one of you.
A blog reader has sent me the following query:
I want to start investing in 1 year when I have learned well and read a lot, above all I think I have a very prudent and well thought out strategy. I would like to start by investing about 300 euros. I know it is little, but it is to start and see how it goes. Of course it would have to be companies whose shares are relatively low priced. What do you think about this?
Commissions, the key factor in the minimum money to invest in the stock market
To determine the minimum money to invest in the stock market, the main factor to take into account is the weight of the commissions in each operation carried out. This is due to the fact that there is usually a minimum commission, which makes the relative cost much higher in small operations. This not only applies to the minimum money to invest in the stock market, but also to the minimum amount for each transaction carried out in portfolio management.
In the following table we can see the relative cost of different operations starting from a minimum commission of € 15, which is approximately what we have seen in the analysis of the Bróker Naranja de ING Direct, Click Trade and Self Bank.
As you can see, in the case of a purchase of shares worth € 300, the relative cost of the operation amounts to 5%. This implies that to make a profit, the shares must appreciate more than 10%, as another € 15 must also be paid when selling the shares.
Although each person can have a different limit, my advice is not to spend more than 1% of the amount of the operation in purchase and sale commissions. That is, if the minimum commission is € 15, I would not carry out operations below € 1.500.