What is the minimum amount I can invest if I want to get into a mutual fund?
If you want to invest for retirement, you can open an IRA with http://www.fidelity.com and start your fund with only $250. This is contingent upon your commitment to put in $250 per month on a regular basis. Fidelity, like a few other firms, offers target-date retirement funds. These are fund-of-funds which invest your money in 22 underlying mutual funds. In other words, you get full diversification by using just one fund-of-funds. The manager has chosen an asset allocation that he thinks is appropriate based on your target retirement date. Then, as you move closer to that date, the manager will gradually change the fund to a more conservative mix, which is what any reasonable investor does. In addition, the manager will rebalance your assets automatically. With one fund-of-funds, you are now invested in all the world’s major investable assets: domestic stocks (small and large, value and growth), investment grade bonds, high-yield bo
Yahoo Finance has a mutual fund screener that allows you to list funds meeting various criteria including: no-load funds, minimum purchase price less than $500. One broadly diversified fund that meets that (and other) criteria is “Schwab Total Stock Market Index Inv” (SWTIX). It has a minimum initial purchase amount of $100. The annualized returns for this broadly diversified fund are: 1 yr=22.13%, 3 yr=13.79%/yr, and 5 yr=10.34%/yr. Start your search at Morningstar, Yahoo Finance, or Schwab. Vanguard has some excellent funds, but the minimum investment is $3000. If you can accumulate your $400 initial investment and then 8 months at $350 you will have $3,200 and many excellent no-load funds are then available.
Long ago I wanted to start investing. I had $1000. I saw an ad in the newspaper that a certain bank would take a minimum investment of $1k so I made an appointment and went in. Here was a guy in a cheap suit sitting in a bank in an upscale neighborhood talking down to me about how all of his investers had at least $10k to invest. I mentioned the ad and he just didn’t want to be bothered. I just had to ask him how good could he be to have all these great customers and he couldn’t afford a decent suit (and his shoes weren’t shined). I went to several banks that had the same services. I finally found someone that seemed to know her business and that I would trust with my money. All of this to say-look them over carefully. There are some real idiots out there. Best advice: go to the library and start reading. You want to know everything you can because it is still your money and your responsibility to handle. You will need to check your investments and be sure you are invested as you want.
Besides the low minimums mentioned by others, T. Rowe Price fund family will allow you to invest a minimum of $50 if you agree to have at least that amount electronically taken out of your checking account each and every month until you reach their usual $2500 minimum. Go to www.troweprice.com for more information.
