Can You Buy Stock for $50? Affordable Investing Made Simple

Yes, You Can Definitely Buy Stocks for Under $50!

If you’re new to investing, you might be wondering if it’s possible to get into the stock market with just a small amount of money like $50. The good news is – absolutely! The days when you needed thousands of dollars to start investing are long gone.

I’ve been helping folks navigate the investing world for years, and one of the most common questions I hear is whether you can buy decent stocks with just a little cash. Not only can you buy stocks for under $50, but there are actually plenty of quality options in this price range.

According to the recent article from StockStory on Yahoo Finance, stocks in the $10-50 range offer a “sweet spot between affordability and stability” since they’re typically more established than penny stocks but still accessible to everyday investors.

Let’s dive into how you can invest with just $50, some good options to consider, and how to avoid common pitfalls that trip up new investors.

How to Invest With Just $50

Before we get to specific stocks, let’s talk about how you can actually invest with small amounts:

1. Fractional shares: Many brokerages now let you buy portions of expensive stocks. So if Amazon is trading at $3,000, you could buy 1/60th of a share for $50.

2. Commission-free trading Brokers like Robinhood, Webull, and even traditional ones like Fidelity offer zero-commission trades, meaning your $50 goes entirely toward your investment

3. Index ETFs Exchange-traded funds give you instant diversification and many trade under $50 per share

4. Regular investing Start with $50 now then add $50 each month. This approach, called dollar-cost averaging can build significant wealth over time.

2 Solid Stocks Under $50 Worth Considering

According to StockStory’s analysis, here are two stocks under $50 that show solid potential:

1. EXL (EXLS) – $40.34 per share

EXL started as an outsourcing company back in 1999 but has evolved into a technology-focused enterprise. They now provide data analytics and AI-powered digital operations solutions that help businesses transform their operations.

Why EXL looks promising:

• Impressive 15.1% annual revenue growth over the last five years
• Share repurchases over the last five years enabled its annual earnings per share growth of 27%
• Strong free cash flow profitability that enables the company to fund new investments or reward investors

The current valuation at 20.4x forward P/E suggests there might still be room to grow.

2. First Commonwealth Financial (FCF) – $15.91 per share

Dating back to 1934 during the Great Depression, First Commonwealth Financial is a financial holding company providing consumer and commercial banking, wealth management, and insurance services across Pennsylvania and Ohio.

Why FCF looks attractive:

• Projected net interest income growth of 15.5% for the next 12 months
• Efficiency ratio improvement of -3.5 percentage points projected for next year
• Strong earnings per share increase of 13.4% annually over the last five years

Trading at just 1.1x forward P/B (price-to-book ratio), this bank stock appears undervalued compared to peers.

One Stock Under $50 to Avoid

Not all low-priced stocks are bargains. StockStory also identified a stock under $50 that investors might want to steer clear of:

Shoals (SHLS) – $10.10 per share

Shoals designs and manufactures products for solar energy systems in Huntsville, Alabama. Despite being in the growing renewable energy sector, there are several red flags:

• Average backlog growth of only 3.3% over the past two years suggests fewer customers are signing long-term contracts
• Free cash flow margin shrank by 5.8 percentage points over the last five years
• Shrinking returns on capital indicate that investments aren’t yielding desired results

At 21.1x forward P/E, Shoals might be overvalued given these concerns.

Beyond Individual Stocks: Other Ways to Invest $50

If picking individual stocks feels risky, here are some alternatives:

Index ETFs Under $50

Many excellent ETFs trade under $50 per share:

• Vanguard Total Stock Market ETF (VTI): Gives you exposure to the entire U.S. stock market
• Schwab U.S. Broad Market ETF (SCHB): Similar to VTI with a very low expense ratio
• iShares Core MSCI Emerging Markets ETF (IEMG): Exposure to emerging markets

Dividend-Paying Stocks Under $50

If you want income while you invest, consider these dividend payers:

• AT&T (T): Currently around $17 with a dividend yield over 6%
• Ford (F): Trading around $12 with a yield of approximately 5%
• KeyCorp (KEY): Regional bank trading around $19 with a dividend yield over 4%

Common Mistakes to Avoid When Investing With $50

I’ve seen many new investors make these mistakes when starting with small amounts:

1. Ignoring fees and expenses: Even small fees can eat into your $50 investment. Stick with zero-commission brokers.

2. Chasing penny stocks: Just because you can buy more shares doesn’t mean you should. Many penny stocks are highly speculative.

3. Neglecting research: Even with just $50, do your homework before investing.

4. Overtrading: Frequent buying and selling can lead to losses. Once you invest your $50, give it time to grow.

5. Expecting overnight riches: $50 isn’t likely to make you rich quickly. Think long-term.

How to Evaluate Stocks Under $50

When looking for good stocks under $50, we use these criteria:

Growth Potential

• Revenue growth rate
• Earnings growth rate
• Industry growth prospects

Financial Health

• Debt-to-equity ratio
• Free cash flow generation
• Profit margins

Valuation

• Price-to-earnings ratio compared to peers
• Price-to-sales ratio
• Price-to-book value

Management

• Track record of execution
• Insider ownership
• Capital allocation decisions

Building a Portfolio Starting With $50

Here’s a sample plan for growing your investments from a $50 start:

1. Month 1: Invest $50 in an S&P 500 ETF like VOO or SPY (using fractional shares)
2. Month 2-3: Add another $50-100, splitting between the same ETF
3. Month 4-6: Once you have $150-200 invested, consider adding one quality stock under $50
4. Month 7-12: Continue adding $50 monthly, gradually building positions
5. Year 2: With experience and a larger portfolio, consider more diversification

Real Success Stories

I’ve seen amazing transformations when people start with just a little money. Take my friend Marcus, who began with $50 a month in 2018. By consistently investing that amount in a mix of index ETFs and a few carefully chosen stocks under $50, his portfolio has grown to over $7,000 today.

Or Sarah, who started with a single $50 investment in Microsoft shares (fractional) in 2020. By adding just $25 bi-weekly and expanding to include a few other tech stocks and ETFs, her account now exceeds $4,800.

Platforms That Let You Invest $50

These popular brokerages all allow you to start with $50:

• Robinhood: No minimum, fractional shares available
• Webull: No minimum, fractional shares available
• M1 Finance: $100 minimum to start, but perfect for regular small investments after that
• Fidelity: No minimum, fractional shares available
• Charles Schwab: No minimum for most accounts, fractional shares available

Bottom Line: Yes, $50 Is Enough to Start!

So, to directly answer the main question – can you buy stock for $50? Absolutely! Not only can you buy stocks for $50, but you can also build a diversified portfolio over time by starting with this small amount.

The key to success isn’t having a huge amount of money to start with – it’s consistency, patience, and making informed decisions. Whether you choose individual stocks like EXL and First Commonwealth Financial that trade under $50 per share or opt for fractional shares of bigger companies, that first $50 investment can be the beginning of your wealth-building journey.

Remember what I always tell my clients: “The best time to start investing was 20 years ago. The second best time is today – even if you’ve only got $50.”

Have you started investing with a small amount? What stocks under $50 look interesting to you? I’d love to hear your thoughts and experiences!

FAQs About Buying Stocks for $50

Can I really buy good stocks for $50?
Yes! As we’ve shown, there are quality companies like EXL and First Commonwealth Financial trading under $50 per share, plus you can buy fractional shares of more expensive stocks.

How many shares can I get for $50?
This depends entirely on the stock price. For a $10 stock, you could get 5 shares. For a $25 stock, you could get 2 shares. With fractional shares, you can invest exactly $50 regardless of the share price.

Is $50 enough to start investing?
Absolutely! While more is always helpful, $50 is perfectly adequate to begin your investment journey, especially if you can add to it regularly over time.

What’s better with $50 – individual stocks or ETFs?
For most beginners, starting with an ETF provides instant diversification. However, if you’ve done research on specific companies, individual stocks could potentially provide higher returns (with higher risk).

How often should I invest $50?
Consistency is key. If possible, try to invest $50 monthly or even bi-weekly. Regular investing helps smooth out market volatility and builds the habit of investing.