Minimum Investment

What it is:

Minimum investment is the least amount of money an investor must invest to take part in a specific investment.

How it works/Example:

Many types of investments have a minimum investment, including mutual funds, certificates of deposit (CDs), unit trusts, limited partnerships and hedge funds. Minimum investment can range from a few hundred dollars to several million dollars, depending on the investment

Why it Matters:

By requiring a minimum investment, investment managers can put a barrier in front of short-term investors who may be inclined to jump in and out of a fund at a moment's notice. It helps provide a certain amount of consistency to the fund manager -- he/she should have a rough idea of how much money is in the fund and available to invest.

Best execution refers to the imperative that a broker, market maker, or other agent acting on behalf of an investor is obligated to execute the investor's order in a way that is most advantageous to the investor rather than the agent.