First things first, I can start investing with little money.
This is one good reason to start investing in stocks today, in fact. There’s a range of shares to choose from. These can allow me the flexibility to choose the amount I want to invest, even if it’s little.
The next step is to choose where to invest my money. For me, the target would be to grow my capital base. And one of the fastest ways of doing that is by buying growth stocks.
But if I’m going to start investing with little money, I wouldn’t buy just any growth stocks. I’d focus on those that are cheap but also relatively low-risk.
Here are examples of five stocks I can invest in today even with little money.
#1. Rentokil Initial: safe and growing
The FTSE 100 hygienist and pest control provider has been a safe-haven investment in 2020. Its demand is relatively secure, and in fact, after the pandemic may even rise faster than it would have otherwise.
The best part is that a single share of Rentokil Initial costs less than £5 today. The downside is that unlike other FTSE 100 stocks it hasn’t brought back dividends. It had stopped paying them when Covid-19 struck last year. So, passive income is ruled out for now.
#2. BP: oil could be in for better times
Even cheaper than RTO is the FTSE 100 oil biggie BP, whose share price is at sub-£3 levels at present. I think the long-term future of oil faces a big question mark, but for the next few years I think it’s safe to say that oil is a safe stock. As we get closer to ending the pandemic, oil prices have started rising and as we go back to our old lives and travel restarts, oil demand should rise too.
In fact, according to some leading forecasters, we are now at the start of a commodity supercycle. This means that commodities across metals, oil, and agriculture should see a boom. BP share price could benefit as a result.
It also pays a dividend, and has a healthy yield of 5.5%, allowing me to make both capital gains as well as a passive income.
The only catch to oil stocks is that the future of polluting industries faces a question mark. It’s trying to pivot towards green energy but how far it’s able to pull that off is also a question mark. This is more a stock for two to three years than a long drawn out timeframe.
#3. Tritax Big Box REIT: benefiting from the online sales boom
At a share price of sub-£2, Tritax Big Box is an investment for the long haul. The online sales boom has impacted this REIT positively, which focuses on warehousing solutions. As online sales increase more, I think it will continue to benefit.
The only drawback here is that it’s UK focused, which means that it’s vulnerable to an extended slowdown if there’s one. Also like RTO, it doesn’t offer a dividend.