Small Investors and Stock Market Investment - Essay Example

One method of minimizing this risk is to use the broad-based index. Along with this small investors have to bear additional administrative costs, as there are different fees on a quarterly and annual basis for the small size accounts. Another requirement set by mutual funds and other brokerage firms is the minimum opening deposit which is considerably high and is almost unaffordable for small investors (Barber and Odean, 2000). ADVANTAGES FOR SMALL INVESTORS IN STOCK MARKET INVESTMENT: If small investors are able to employ appropriate strategies they can be benefited from the stock market investment.

Along with different barriers, there are certainly also some advantages for the small investors in stock market investment. Because of the limited amount of budget and small size of the portfolio, the small investor can go for stocks that have high returns without affecting their prices and at the same time can hold the shares for a longer period of time. Small investors are not under any corporate or professional pressure to indulge in quick buying and selling activities. In this way, by focusing on the best-performing stocks and holding for a longer time period small investors can benefit from the stock market investment (Griffin, Harris, and Topaloglu, 2003).