Mutual funds have a minimum investment requirement, usually in the thousands of dollars. As for trading stocks, your stock trading fees will eat you up if you only have $250 to play with.

I’d say put your $250 in a CD at the bank. Though if you plan to make investing in stocks a long term event then by all means open an online stock account.

My concern is you say you mention you are interested in the stock market but don’t want to do the work/put in the time. You’d be better off investing in an ETF than a mutual fund for what little you have upfront to invest.

One of the best ways, in my opinion, to start investing with just a little cash, is to open a DRIP Plan.

They are seldom recommended by brokers due to the low rate of commissions received. However, these
reinvestment plans can be very powerful long-term investments. Studies have shown that DRIP’s are one of
the best strategies on Wall Street.

They are inexpensive and easy to start. New investors to the stock market should definitely consider a DRIP Plan.

Companies like Toyota, Royal Canadian Bank, Sony, Bank of America, General Electric and many other Blue Chip
Stocks can be purchased through your DRIP Plan, with as little as 1 share in most cases.

These long-term plans are great for beginners as well as veterans. Check them out.

Best of Luck

$250 belongs in a bank as an emergency fund. The market’s not that promising, now. Later, with $250 loose change, check around for best paying CDs. When you do start investing, ignore penny stocks, and invest in blue chips (or good ‘light blues’) recommended in Barrons. In meantime, start studying investing with Jim Cramer’s books.

Most people don’t realize that stocks are typically sold in blocks of 100 shares. The fees involed in onesy – twosy stocks would be so outrageous you’d wipe out the @4250 on one or two trades. The amount you have suggests a savings account because you even under the minimum for most CD’s or MOney Market accounts. Plus, the $250 might be needed in an emergency and should be readily available.

First of all, $250 seems to be not much when you’re talking about investing in stock.
Secondly, if that’s all you have right now you should not investing 100% of your money into stock.
Mutual fund or CD account requires minimum a lot more than $250. So in my idea, you just put it in a saving account. Wait until you have more capital then start thinking about investment in stock.
Good Luck

Considering your financial poistion my suggestion is you opt for mutual funds. They are simple to operate. The investment decisions are done by fund managers. Gain some knowledge with respect to the stock market functioning before directly entering into trading. In MF So for SIPs – here you can invest a pre-determined amount at pre-determined intervals.

you might keep your money in the bank and just watch afew stocks to begin with. until you have afew thousand $ to possibly lose, then keep your 250.00 as an emergency fund as others have suggested. watch green energy stocks…GRGR.PK on the NYSE and TMG.V and SBX.V on the TSX ….. see how they perform over the next few months, they are penny stocks in good companies….

Before you start buying stocks – pick up the book "The Intelligent Investor" by Graham – it’s on a must read list by Warren Buffet – it’ll give you good insight and guidance about picking stocks to invest in.

Mutual funds are good to diversify risk – not putting "all your eggs in one basket" as you do with stock purchases.

ETFs are another way to diversify your risk and are more tailored by market segments – so if you’re interested in tech stocks, you can pick an ETF that specializes in tech and invest in that – like a mutual fund – you’ll own bits and pieces of shares of many companies – but the ETF will be all tech companies – as opposed to the mutual fund that may be all small cap growth companies.

I’d do some studying first and build up some more capital – keep your $250 in cash investments – easy to move in or out of like a money market or savings account – and invest other funds into the markets.

Good Luck!