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When we travel stock forums or when we receive dozens of emails per day, as in ABC Bourse, Carmel advisors broker we realize that this is one of those that occur most often among novice investors. The amount that should have to begin a stock investment is apprehended in various ways by young shareholders. Often they tend to obscure important items, such as brokerage fees and minimize such widely minimum amount that can invest in good conditions. Future market success does not depend on the amount of cash to be deposited in the account. The easy shareholder will be put on a par with one who only has some savings to start investing in stocks. However, Carmel advisors this reasoning reaches its limits when the deposits are too small, hence the reason for this article. If there is no maximum limit to the amount recommended can be put on its securities account, however, we propose to give you some advice on the minimum amount. Often, we find that shareholders are under capitalized, that is to say with too little funding, are those that disappear quickly in times of market crisis. Does not have enough money on his account as a number of negative consequences that we describe below: The incidence of brokerage fees Place orders in exchange involves paying through running order for you on the Carmel advisors market. The average price of a stock market order is about 0.5 % of transaction amount with a minimum of 10 $. If you buy stocks and you resell, so you will spent two types: a buy order and a sell order. This transaction will therefore cost you $ 20 minimum. To start earning money, he will earn more than brokerage fees. Thus, with the minimum set of perception ( about 10 $ per order ) you are penalized if you place a small order. Past a certain size, there will be no difference. In this example, Carmel advisors forex we assume that brokerage fees are 0.5 % of the amount of each order with a minimum charge of $ 10 per order. Scenario 1 : You buy $ 500 shares ( 50 shares Alcatel 10 $ for example). The title Alcatel rose 4 % in the next few days, quoting $ 10.4. At this point, you decide to sell your 50 shares to take profits. In fact, we see that in this operation you have gained nothing. You bought 500 $ of action that you sold 520 (50 shares at $ 10.4 ). As you passed two orders, you pay 20 $ brokerage, your gain is canceled, you have gained nothing. Scenario 2: Suppose now that you buy for $ 2,500 shares or 250 shares at $ 10. Carmel advisors capitals As previous example you decide resell your 250 shares 10.4 $ because they progressed. What have you won? By performing a transaction $ 2500, you won $ 74.5 about 3% of earnings up 4 % of the action. The remainder of brokerage fees. From this example, your order is $ 2,500 or $ 25,000 you will still earn 3% to 4% variation of the action. You're subject to the minimum charge brokerage fees. The impact fee is often minimized or completely obscured by beginners shareholders which is a major mistake, especially when you start with little cash. We also see an underlying problem that when we move from small orders was Carmel advisors capitals additional pressure on the shoulders. Indeed, we must achieve a significant performance for minimum power break even ( as we have seen with an increase of at least 4% as in the previous example with an order of 500 $ ). The excessive use of leverage DTH can invest more money than you actually owns his account, liquidity while acting as a blanket. In France, the system allows DRS to initiate up to five times more money than we have. Thus, with a small account of $ 2,000, you can invest up to $ 10,000 on the SRD values ​​at time t. In practice, we observe that the use of a high leverage is often done by people with small portfolios. Portfolios grow more and more investors decrease the leverage they agree. We must not forget that leverage is a double- edged sword, it can multiply the gains, it can also increase losses. When lever is invested in five, the maximum level, Carmel advisors capitals a variation of 10% of the share on which you are invested, our varied portfolio of 50 % up or down depending on the direction of change value. We see with the resulting danger this simple example. In addition, small portfolios are often the prerogative of novice investors, the danger is even greater. Not possible diversification Without going into the intricacies of financial theory and portfolio management, there is no doubt that a portfolio invested in a single value is much riskier than a diversified portfolio that contains four or five different values. A small initial investment will therefore not have access to a diversified portfolio, that is to say, to make a distribution of risk with 5 to 10 different values. Imagine if we bought shares in a company that advertises in the morning before the opening very poorly. He then ensue a sharp drop action, 10 or 20 % decrease is a relatively common phenomenon that occurs in the stock market. You will have to wait long to find his purchase price can no longer invest in other securities. conclusion We believe that the minimum amount to invest in stocks in good conditions is about 2000 $. This does not yet allow diversification but lets start to put on two to four different values ​​( approximately $ 1,000 per line of action) by modulating the leverage DRS zero to maximum twice about. To begin properly diversified view to invest in other financial products, you will need about 5 to $ 7,000. Finally, to begin to diversify into other geographical areas, have at least $ 10,000. If you do not have this minimum amount to start investing directly in equities, we recommend you first time to buy mutual funds ( SICAV or FCP ) invested in equities. This will allow you buying a single product, to invest several values ​​at once. This is a management of your portfolio will be much less dynamic but you will be able to begin to taste the award pending its larger economies.


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