If you’ve recently gotten a generous birthday gift or have saved up some money and are looking to put it to good use, then look no further! We’ve got you covered with a few suggestions as to how you can invest that money. A lot of people think that the stock market is only for the ultra-rich, but the truth is that anyone can benefit from investing. Here’s how:
Low-Cost EFTs are your Friend
ETFs (exchange-traded funds) are great for new investors because they don’t require one to do a lot of research. They are a safe place to put your money because they are indexed funds, such as the TSX 60 index. Through ETFs you can put your money in a variety of stocks at once, making things simpler.
Set up a Diverse Portfolio with Fractional Shares
Having a diverse portfolio can be defined as owning a variety of stocks that belong to different market segments. Fractional investing is when you buy a portion of a share. For example, Apple.
Fractional investing wasn’t always so widely available, but more brokerages have introduced it more recently. With fractional shares, you can buy a portion of a share of stock if you can’t swing its price in full. For example, if you want to buy a share of Tesla, you’ll have to have around $600 USD (which is a lot if you only have $1000 to spend in total). If you wanted to invest in a variety of companies, you could buy a fractional share of Tesla.
Invest in Dividends
Dividend stocks present two ways to make money: first, they can grow in value over time (like all other stocks), and second, you can invest the quarterly payments you make from them into other stocks, diversifying your portfolio.
Dividend stocks are also beneficial in times when their prices have not fully recovered after the COVID dip and because you get to keep collecting those quarterly payments (which makes things overall a bit less painful).
So there you have it. $1000 may not seem like enough money to start investing, but there’s plenty you could do with it.