You can buy stocks with $50 or even less if the stock is valued at less than $50. Some brokerages also will let you buy fractional shares of stocks if you can't afford to buy an entire share. You also can invest in the market indirectly through exchange-traded funds and other funds that allow for small investments. With small investments, though, it's important to watch the commissions you're paying to your broker to make sure you're not losing any gains to transaction fees.
If you only have $50 to invest, you can still purchase a wide variety of inexpensive stocks which may have the potential to deliver impressive gains over time.
Buying Stocks Under $50
If you have $50 to spend on the stock market, you can start by looking for stocks that are valued at less than $50 to find some candidates for your investment.
You can find these stocks on financial news and information sites or through the website of your favorite broker. Many sites, such as the S&P 500 or NASDAQ, list every stock in major indexes with its corresponding price to help you find stocks that are worth less than $50 per share.
Once you find a stock you want to buy, you need to find a brokerage firm that will enable you to buy it. Different firms charge different commissions for different types of transactions, while some, such as Robinhood, even enable commission-free trades in certain circumstances. Evaluate the brokerages you're considering to make sure that their fees and other services, such as access to customer services and online research tools, meet your needs and then purchase the amount of stock that you want.
Investing in Fractional Shares
If you have only $50 to invest, there are still ways to invest in companies whose shares trade at more than that price. You can do this through companies that enable you to buy fractional shares in a company, such as Stockpile or Folio Investing. Generally, those companies will let you buy and sell portions of a share in a company, receiving the appropriate portion of any dividends the companies pay.
As with buying entire stock, it's a good idea to shop around to find a broker who supports your needs with minimal fees.
Investing in Funds
You also can invest indirectly in funds, such as exchange-traded funds, that invest in particular collections of stocks in the stock market. Many brokerages offer commission-free ETFs and mutual funds that you can invest in with relatively little money, including E-Trade, TD Ameritrade and Charles Schwab. This will enable you to put all your money into the market rather than into trading commissions.
Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.