Elsie UdohDo you have $100 (₦174,588) just stashed somewhere in your savings because you think it’s not enough to invest?
There are stocks in which you can invest that money and earn a tangible profit. This will do a lot better than just keeping it in a savings box where it merely sits idly without any returns.
Join our WhatsApp ChannelSince your finances are limited, you’ll need to be very strategic about this one to avoid making bad deals that make you wish you left your money in the savings box. Although investments are generally risky, you can still earn a profitable sum when you invest correctly.
This guide will help you make the best use of your investments and profit from stocks with $100.
How to Profit From Stocks with $100
Stock investments thrive on one basic principle. And that principle is a very vital one that ensures that you invest wisely and make a profit.
This principle is especially important when you don’t have enough cash to spare. After all, the essence of your investment is to make money and not lose the little one you have to a bad deal.
Consider this principle as an ‘investment hack’. What is this principle that we’ve been yapping about? Here it is: Never decide on investing without doing a fundamental analysis.
What this means is that you should look at the financial statements, market, and leadership of a company before buying shares from them. This helps to avoid a bad deal. Investments are already risky with fluctuating market conditions; you do not want to have a volatile company mess it all up for you.
When it comes to investing, it’s better to be triple sure than to be in doubt. If that’s clear enough, then see how you can start investing in stocks here.
But what’s the point of starting an investment when you’re not sure of its profitability? So, to clear your doubt on stock investments, see how you can profit from stocks with $100 here:
1. Choose Quality Stocks
It’s very essential that your stock investment is not dead on arrival. To ensure this, choose quality stocks that are guaranteed to earn you profits in a short amount of time.
Investing in options like blue-chip stocks is a great place to start because these stocks are owned by organisations with stable performances. These organisations are also less volatile and are not easily affected by market fluctuations.
Dividend stocks are also another quality stock to invest $100 in and profit from quarterly. Look out for top-paying dividend stocks to buy in sectors like banking and finance, consumer goods, industrial goods, telecommunications, and oil and gas.
You can reinvest your dividends to grow your investment portfolio and generate more profits over time.
2. Invest For The Long Term
Investing for the long-term is also a great way to profit from stocks with $100.
When it comes to the stock market, investing for the long term can be tricky with market fluctuations and changes in trends.
For example, a sudden hike in the interest rate or GDP growth could make you tempted to sell, or even negative factors like a change in the fiscal and monetary policy by the government can influence your decision.
However, it’s best to resist that urge to sell and leave your investment for the long term to benefit from compound interest.
Compound interest helps your money to make money for you and accelerates the growth of your investment over time.
So don’t just sell your stocks and move on, but use your interests to reinvest, diversify your portfolio by buying more stocks, and watch your $100 multiply in several ways for you.
3. Use a Robo-advisor
Since you have a limited amount to invest and probably don’t have enough in-depth market knowledge, you can consider using a robo-advisor.
This is an automated digital financial service that will help you manage your investment portfolio and start with low amounts.
A robo-advisor helps you to make profits off your investment by automatically rebalancing your portfolio and reinvesting your dividends.
You can start by trying out robo-advisors like Wealthfront and Vanguard.
4. Use Fractional Shares in Big Companies
Investing in well-established companies like Amazon or Google might seem impossible with $100.
However, brokerage platforms offer fractional shares that allow you to buy stocks from these companies without investing the full price.
This makes high-performing stocks more accessible to you even with your limited funds and allows you to benefit from the growth and dividends of these companies without needing a lot of money.
5. Invest in Exchange-Traded Funds (ETFs)
These are collections of stocks or bonds that track an index, sector, or commodity and allow you to invest in a basket of stocks rather than a single company.
So when you invest in ETFs with your $100, you are investing in more than one stock. This will increase your interest and reduce the investment risk compared to single-stock investments.
Tips to Save $100 Monthly for Stock Investments
If you want to get started buying stocks but don’t have $100 yet to begin your investment, then here are some tips that you can implement to help you save $100 in one month:
- Cut back on your subscriptions. You can do this by reviewing your streaming, gym, and other monthly subscriptions. Look for one or two services that you can cut back on to save money instead. For example, rather than pay for gym membership, you could start home workouts instead.
READ ALSO: 25 Fun Exercises To Do At Home And Get Fit
- If the bulk of your earnings is spent on dining out, then you can reduce the rate at which you eat out and try home-cooked meals instead. This not only helps you save money but also makes you eat healthier cooked meals.
- Set a specific amount to be transferred to a savings account weekly. This will help you to avoid spending all the money you have all at once.
Risks to Expect in Stock Investments and How to Mitigate Them
The stock market can be unpredictable, so you need to be prepared before making investments.
To avoid making mistakes and losing out on your investments, here are some potential risks to expect and how you can avoid them:
- Market Volatility: Stocks can fluctuate significantly in the short term. To avoid losing out, don’t try panic-selling during a downturn. Long-term holding often yields better results.
- Avoid relying on a single stock or sector. Instead, diversify through ETFs or invest in various sectors to mitigate this risk.
- After investing your first $100, save up enough to create an emergency fund. This will help you to avoid spending your interests immediately. It will also give you more funds to use to invest in new stocks.
Conclusion
While $100 might seem small, it can provide just the right amount to invest and profit from stocks.
Use strategies like choosing quality stocks, investing long-term, using a robo-advisor, using fractional shares, and investing in ETFs to profit from stocks with $100.
Watch out for changes in the market and also take note of other investment risks to avoid losing out on your earnings.
Elsie Udoh is an SEO content writer who specialises in writing engaging stories that resonates with diverse audiences. She studied mass communication at the Lagos State University.
