Stock Price Charts

Is it a good idea to buy 1 share of many kinds of stock?

Especially those that have dividends so the dividends can be used to buy more stock of the same company? I head some lady became a multi millionare by only buying 3 shares of stock and the dividends ended up making her rich. Or should I buy at least 10 shares, I have very limited funds for investing in stocks.

Public Comments

1. Bad idea. If you have limited funds your best bet, after having an emergency fund in money market, is to put your money into mutual funds. That way, you do own small bits of many companies. Check out mutual funds from Vanguard or from Fidelity Investments.
2. You're going to have to pay a transaction fee for each purchase you make, so at $10 per purchase, buying ten shares of the same company would cost you $10, whereas buying ten shares of ten different companies would cost you $100. If you have only limited funds to spend, multiple shares of the same company is the most cost-effective way to go. The woman you're talking about bought her three shares of stock in 1935. It took 75 years for them to turn into multiple millions. Are you prepared to wait that long?
3. it is not a bad idea, because of the diversity of you're portfolio, you will not will loose all you're money if one stock goes down, however you will be unable to make large amounts of money if you do this. i would suggest that you invest in just 1 or 2 companies that you feel comfortable with and know are good stable companies. i would suggest contacting a stockbroker or licensed professional if you are new to investing. and the women who made millions most likely invested a good amount of money, at least $10 000.
4. The commissions will eat you up. Buy a good no load, low fee Mutual Fund. You'll be much better off.
5. With capital gains and dividend tax law changes coming in 2011, I would be a net seller of the stock market. So, don't invest in the market until a clearer picture is present.
6. Bad idea. The brokerage fees will kill you. If you have "very limited funds", you should NOT be investing in stocks. Save up your money and then open a mutual fund account with Vanguard, T. Rowe Price, etc. You can add to that without fees.