How much could I lose investing with an online broker?
I only have $500 to invest, could I lose all of that and more?
- 6 months ago
Just buy on margin you can't lose
- BLv 76 months ago
you probably need a bit more to open an online account
there is probably a requirement to show your assets if you buy on 'margin' , that is, on loan.
so it is possible to lose more than $500 but if that is the total assets, it is improbable the broker would allow you to borrow and lose more.
- tiescoreLv 66 months ago
Everything has risks, even a safe bank savings account has inflation risk. The key to investing is getting a good return while diversifying out the risks.
Get the Dummies Guide to Investing and the Dummies Guide to Personal Finance, get a spreadsheet program, start developing financial goals, make a plan to achieve those goals and build wealth & spreadsheet out the plan and track your asset & liabilities to calculate your net worth every month, start enacting the plan with the $500 and budget future income towards making that plan a reality. Strive to make that net worth number grow month to month.
- Anonymous6 months ago
Everything. On the flip side you could gain everything.
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- AlCaponeLv 76 months ago
The word "investing" automatically means you could lose everything -- or you could gain much more, depending on your choice of investments. It has little to do with where you invest -- online or otherwise.
- SlumlordLv 76 months ago
In theory you could lose up to about 50% more in you had a margin account but this is highly unlikley. Expect you could lose the whole $500 but probably not much more (maybe a bit more from fees).
- ErikLv 76 months ago
The most you could lose is $500. No different than if you walk into a casino with $500.
- Coffee DrinkerLv 76 months ago
You generally can't lose more than your initial investment.
For example lets say you buy $500 worth of Microsoft stock. If Microsoft goes bankrupt your stock would be worth $0 and you will have lost all your money. You can't lose more because stock price can't drop to less than $0.
If you short sell a stock there's theoretically no limit to how much you could lose. When you go short, you make money if the stock goes down, and lose money when the stock goes up. Since there's no maximum amount that a stock can go up, there's no limit to how much you can lose. HOWEVER - your broker will not allow you to lose more than the amount you have in your account. If you short sell a stock and it starts going up in price the broker will automatically close your position on that stock when you've lost all the money in your account.
You could also theoretically lose more than your initial investment if you buy stocks on leveraged positions - which is when you only pay a portion of the purchase price and the broker essentially loans you the rest. But again the broker will automatically close those positions before your account goes negative.
- oldprofLv 76 months ago
Yes you could...and the "more" would be the broker and transaction fees if any.
Your best bet is some form of mutual fund where you can invest a little at a time on a regular basis. And key here is to keep putting a little at a time in over a long period. Before you know it, the little bit will become a nice portfolio.
You can still lose with a mutual fund, but it's less likely if the market continues to expand over time. Which it has done for decades.
If it drops for a while, like back in 2007, don't panic. Keep your portfolio going and keep putting in a little bit. When the market regains, which it always does, you'll show a big gain in the fund.Source(s): I'm retired and currently live off my investments.
- A nobodyLv 76 months ago
First of all - there is no such thing as an "on-line" broker. Offering clients with services through the internet is a service AND not a type of brokerage firm. All major brokerage firms provide their clients with on-line services.
How much can you loose - no more than what you put up.. It doesn t matter how what type of firm you use - if you don t know what you re doing you have a good chance of loosing money.Source(s): from The Street