Hello there, I'm a seasoned financial advisor with a wealth of experience in personal finance and investment strategies. I'm here to guide you through the intricacies of trading and investing, ensuring that you make informed decisions that align with your financial goals.

Starting with a $100 Investment

Trading and investing are two different concepts. Trading typically refers to the act of buying and selling financial instruments within a short time frame, often with the intent to profit from short-term market fluctuations. Investing, on the other hand, is a longer-term approach where you buy assets with the expectation that they will grow in value over time.

Understanding the Costs

When you're starting with a $100 investment, it's crucial to understand the costs associated with trading. As you mentioned, buying and selling a single stock can cost up to $20 at some brokerages like E-trade. This means that if you were to make a single trade, your initial investment would be significantly reduced before you even begin to see any potential gains. This is a significant hurdle for small investors.

Finding Affordable Investment Options

Given the high cost of a single trade, it's wise to look for more affordable investment options. One such option is the Stash app, which offers a lower-cost entry point for those with less than $5,000 to invest. With a $1 monthly fee, it provides a more accessible way to start investing, especially for those with limited capital.

The Power of Compound Interest

Even with a small investment, the power of compound interest cannot be underestimated. Over time, even small amounts can grow significantly if invested wisely. The key is to start early and to invest consistently.

Diversification

Another important aspect of investing is diversification. This means spreading your investment across different types of assets to reduce risk. With a small initial investment, it might be challenging to diversify, but there are ways to do so through low-cost index funds or exchange-traded funds (ETFs), which can provide exposure to a broad range of assets.

Education and Research

Before you start trading or investing, it's essential to educate yourself. Understand the basics of the stock market, different types of investments, and the risks involved. Research the companies or assets you're interested in and make decisions based on sound financial principles.

Long-Term Perspective

Lastly, adopt a long-term perspective. The stock market can be volatile in the short term, but historically, it has trended upwards over the long term. By focusing on the long term, you can potentially benefit from this upward trend and the power of compound interest.

In conclusion, while starting with $100 might seem like a small amount, it's a great way to begin your investment journey. By choosing affordable investment platforms, understanding the costs, diversifying your portfolio, and adopting a long-term perspective, you can lay the foundation for a successful investment strategy.

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Buying and selling one single stock can cost up to $20 at a place like E-trade! All of a sudden your $100 investment is only worth $80 -- before you even get started. We suggest looking for a more affordable way to invest, like the Stash app. If you're investing under $5,000, you'll pay a $1 monthly fee.read more >>