Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

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.

Related Terms View All
  • Auction Market
    Though most of the trading is done via computer, auction markets can also be operated via...
  • Best Execution
    Let's assume you place an order to buy 100 shares of Company XYZ stock. The current quote...
  • Book-Entry Savings Bond
    Savings bonds are bonds issued by the U.S. government at face values ranging from $50 to...
  • Break-Even Point
    The basic idea behind break-even point is to calculate the point at which revenues begin...
  • Calendar Year
    If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December...