The title of this article is a little misleading. You can’t invest with ‘no money’ (unless you’re talking about time). You can, however, invest with little money. The only way to invest with a little money is by purchasing penny stocks.
Most investors and professionals will shudder at this thought, with good reason, but if you only have a little money to spare each month, this could present a good opportunity, especially in a recession.
Keep in mind that when you invest long-term, once you dump your cash, it’s gone. If all you have is $25 a month to save, why not try something risky? It’s such a small amount that if you put it into a CD or index fund, your return is going to be mere pennies. If you try out penny stocks, your potential for return is huge.
During a recession, most penny stocks are cheap for statistical and economic reasons. When spending on average goes up, those companies will earn more as well. Statistically speaking, if you chose one company per month (a penny stock), and invested $25-$50 per month in a different company your chances of losing money will be slim.
The way to do it is simple. Start by going to www.thehotpennystocks.com and see what’s available. Research the companies on Yahoo finance and decide for yourself whether or not you want to invest. Zecco is a great discount online broker and only charges $4.50 per trade.
Remember that everything follows the unemployment rate. If unemployment is high, stock prices take a plunge. If unemployment rates drop, stock prices will soar. People need money in order to spend it, and when there are no jobs, there is no money. To invest, the only thing you need is an understanding of the macro economy. Invest your money, and then don’t think about it for at least one economic cycle (7 yrs average) – and there’s no better time to invest than during a recession, especially in penny stocks.
And yes, it could be considered gambling, but isn’t all investing risky enough to be considered gambling? Six Flags was $0.30 when it was still on the market, and now it’s been de-listed. Pier-1 on the other hand went from $0.11 per share to a full recovery at $2.00 per share. Ultimately it’s up to you, but if you want to invest with ‘little money’ penny stocks are the way to go.