Investments Under $1,000

Q: I live in Atlanta, am in my mid-20s, and teach for a living. Although I am invested in my 401(k) plan at work, I am concerned about my future and would like to develop some form of investment portfolio. I’ve been to a few investment Websites, but all of them want a minimum of $2,500 to get started. That’s over my budget. Are there any firms with which I could start a portfolio with just $500 to $1,000?
–C. Harris, Atlanta

A: There are a number of firms that will allow you to start a portfolio with $500 to $1,000 (see “Investing 201,” this issue). The thing to remember is that each will provide differing levels of services and charge a variety of fees. Be sure to choose a provider that meets your needs.

Unfortunately, many of the firms that accept low minimums to start an account have additional fees and low-quality services that make them less of a bargain. You may want to try one of the following: BuyandHold.com, which has no account minimum and allows you to purchase as little as $20 worth of a stock; Scottrade (www.scottrade.com) has a $500 minimum. The site offers more than 7,000 mutual funds and regular stock trading for lower fees than most online brokerages. The firm also has 140 branches nationally if you want to speak to a real person; TD Waterhouse (www.tdwater house.ca) has a $1,000 minimum and fees of up to $15 for stock trades. It also has 170 branches nationally. Sharebuilder.com, which you can access at blackenterprise.com, has no minimum to start, and allows you to make real-time trades for $15.95.

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