I want to invest $100 dollars per month what do i need to know?

I've got $100 dollars to spare every month and was thinking about investing the money for the future. I was thinking about investing in the stock market but I need a money management strategy so I can minimize my risk without minimizing my return?

If you have $100 to spare at the end of the month you can get exposure to the stock market and make a decent return in the long run. Many people ask how to make money with small investments and the answer is you have to do your research and find the best investment vehicle for your money. There are literally hundreds of investments you can make with as little as $100 so you have to use the money wisely.

Attitude to risk

Always assess risk when investing your money; if you have a small amount then you need to ask yourself can I afford to lose this? If you are risk averse then the answer will be no and you need to invest your money in places where the return is reasonable however you do have the peace of mind that the money will be there at the end.

Asset allocation

Sometimes you can split your capital into percentages and then use a certain percentage for certain risk. If you are very risk averse yet you want the opportunity to really want your money to grow then you might want to consider this. This works by choosing a level of risk for a specific amount of money that you are comfortable with. If you have $1000 then is you are not into risk then you can place 70% into safe investments, 20% into medium risk and the remainder into high-risk.

Choosing wisely

Once you have worked out your tolerance to risk you need to choose the investments wisely. You can make money and you can lose money on some vehicles so you need to really do your research. When you are choosing a low-risk investment try looking for a deposit account where the interest rate is high. For investments with medium-risk you should consider placing your money into property as it has a record of making good returns in the long run. For high-risk you can look towards the stock market. Remember when choosing look as past performance and the outlook for that investment in the future, even if the past performance has been great this is no indication that it will continue which is why you have to get an analytic opinion in the investments outlook.

Term

Always take into the account the term when you are investing, some vehicles take longer to mature while other can be instant access. Remember when you tie your money up for longer you can expect to make more, if you choose for instant access then the potential will be less. This whether you can do without this money for a period of time and if you can it is better to tie it away for a while.

Commission and fees

Always consider the commission and fees when it comes to looking your money away, if the fees and commission are so high that you can’t really expect to make money then do not invest your money there.

Tweaking your asset allocation

Once you have created your investment strategy you can always add to it in the specific percentages outlined. If you start will $1000 and want to add $1000 every month then you can again split the money and invest it in the different asset classes. Your attitude to risk will also change and at this point you can also change the percentages so that you are allocating more to high and medium-risk assets.

Reputable companies

You have to make sure you research into the company’s financial health to check if they are reputable and won’t run away with your money when it all goes wrong. In the UK many firms are regulated by the Financial Services Authority and this helps you get compensation if the investment companies go bankrupt.

When it comes to investing in small amounts the key to success is research, do not follow the tipsters as this is a recipe to make lots of money and lose lots of money. Instead of jumping at any tip given to you make a decision based on facts, past performance and future outlook. Remember to be patient with your money as these things take time to mature. You will eventually make a reasonable return in the long run.