Investing in Amazon can be highly rewarding but also requires proper research and planning, especially if you only have $250 to invest. Here are 5 best ways to invest in Amazon with limited funds. First, you can buy fractional Amazon shares through platforms like Motif Investing. Second, invest in Amazon ETFs like the Consumer Discretionary Select Sector SPDR Fund. Third, use a robo-advisor that builds you a diversified portfolio with Amazon. Fourth, invest in companies in Amazon’s supply chain. Fifth, use options trading strategies like selling puts. Throughout, research Amazon thoroughly, focus on long-term growth, and diversify your investments.
Buy Fractional Shares of Amazon Stock
One of the best ways to invest in Amazon with limited funds is to purchase fractional shares. Rather than buying whole shares at the current price of around $3,000 per share, you can buy just a fraction of a share. Motif Investing allows you to invest in slices of shares, starting at just $250. This gives you exposure to Amazon stock and upside potential without having to pay for a full share. You can also use platforms like Stockpile and Stash which offer fractional shares.
Invest in an Amazon ETF
Exchange-traded funds (ETFs) offer another great option to invest in Amazon on a budget. ETFs provide diversified exposure to a basket of stocks and you only need the share price of the ETF which is usually around $50-$100. A good choice is the Consumer Discretionary Select Sector SPDR Fund which has a 10.29% weighting in Amazon. This ETF gives you exposure to Amazon and other consumer discretionary stocks in one purchase. Other ETFs like the Fidelity MSCI Consumer Discretionary Index ETF and Vanguard Consumer Discretionary ETF also provide solid Amazon exposure.
Use a Robo-Advisor
Robo-advisors provide automated investing services, including portfolio construction and rebalancing. With most robo-advisors you can start investing with a minimum of $250 or less. When you sign up, you take a risk survey and the robo-advisor will build you a diversified portfolio including stocks, bonds and ETFs. Given Amazon’s large market capitalization, most robo-advisors will likely include some allocation to Amazon in your customized portfolio. Robo-advisors offer an easy way to get started investing in Amazon.
Invest in Amazon’s Supply Chain
Rather than investing directly in Amazon, you can invest in companies within Amazon’s large supply chain. This includes delivery services like FedEx and UPS that provide shipping for Amazon orders. Or retailers that sell products on Amazon’s marketplace like eBay and Etsy. Logistics real estate companies that lease to Amazon distribution centers also benefit from Amazon’s growth. Investing in these types of companies provides indirect exposure to Amazon.
Use Options Strategies Like Selling Puts
Options trading allows sophisticated investors and traders to benefit from Amazon’s stock performance with less capital. Options strategies like selling puts allow you to collect premium income upfront. An investor sells a put option on Amazon at a strike price they are willing to pay, and collects the premium while obligating them to buy Amazon at the strike price if assigned. This lets investors get paid to “get long” Amazon stock at prices they want to buy at.
With $250 there are multiple smart ways to invest in Amazon including fractional shares, ETFs, robo-advisors, supply chain stocks, and options strategies. Focus on long-term growth and diversify.