How to Invest Small Amounts

Many people assume they don’t have enough money to become an investor. But there’s no need to wait until you’re rich – starting small is one of the smartest steps you can take to reach your financial goals.

And thanks to the digitalisation of private banking methods, it’s now possible for you to invest in ways that were once only available to the wealthy.

This article will show you how to cost-effectively invest small amounts of money online. You can get started with 2,000 (or even as little as 500) francs.


What are the best investment ideas for small investors?

Saving money in your bank account and contributing to pension schemes is a great start. But think about it: Is the pension going to cover the lifestyle you’re aiming for in retirement? And how many millionaires got rich keeping their money in a bank account?

The problem is, in a Swiss bank account, your money will earn around 0.01% interest. That means a 5,000 franc balance increases by less than 1 franc per year (we cover this topic in our article The Smart Alternative to Swiss Savings Accounts).


What’s the best way to invest small amounts of money?

The stock market is generally a good balance between risk and return – as long as you intend to hold onto your investment for at least 5 years. That’s because although the market moves up and down constantly, it has always moved in an upward direction in the long term.

Sure, stock market investments are riskier than leaving your cash in a bank account, but they also offer a much higher potential return (historically 6% per year on average – including the big economic crisis such as 2008).


Advantages of stock market investing for smaller investors

Good returns

Average growth around 6% per year, compared to 0.01% interest if you keep the money in your bank account.

Risk management

Your portfolio can be optimised to the level of risk that’s appropriate for you.


Invest in companies that are aligned with your values – it’s possible to create a positive impact on the world without sacrificing returns.


If you need money in a hurry, the money generally will be back in your account within seven business days.


6 Steps for Investing Small Amounts of Money

Step 1: Figure out the basics

How much money do you need to invest in stocks? We recommend at least 2,000 francs.

That’s the amount you need to diversify your investment – i.e. buy a range of different company stocks in different industries and countries.

When you invest small amounts of money, it might be tempting to put everything into one or two companies. This is a rookie mistake!

Let’s say you only buy Apple shares. If a crisis hits that company, your investment will be in trouble. Likewise, if you buy a range of different company stocks, but they are all in the same industry (remember the dot-com bubble?).

With 2,000 francs, you can comfortably buy stocks in 30-40 companies, and spread your risk across a range of different factors.

Don’t have 2,000 francs to invest?

At Yova, you can get started with 500 francs if you set up a savings plan where you automatically contribute to your investment account each month. Once it hits 2,000 francs, we invest the money for you.


Step 2: Consider your risk profile

Risk can be carefully managed when you take a long-term view of investing in the stock market. Our investment experts recommend a five-pronged approach to risk management.

  • Think about your capacity and appetite for risk.
  • Diversification is important. As mentioned before, don’t put all your eggs in one basket.
  • Balance stocks with less volatile assets, such as bonds.
  • Regularly rebalance your portfolio (see more: what is rebalancing?).
  • Have a view of holding onto your investment for 5 years or more


N.B. the last point is important. The stock market has good years and it has bad years, and there’s never a guarantee that you will make a profit in five years. But generally speaking, the market has always moved in an upward direction over time – the longer you hold onto your investment, the more likely you are to have an attractive return on your investment. 


Step 3: Choose your stocks

What companies should you invest in? It might be tempting to try to pick The Next Big Thing. But, since no one can predict the future, trying to pick “winning” stocks is almost always a losing strategy.

In fact, it’s not much more effective than throwing darts with your eyes closed.

Instead, we recommend choosing a range of different stocks that are aligned with your values. This is your big chance to have real ownership in companies that share your vision for the world.

Whether you have a four or a seven-figure amount to invest, research shows that impact investing does not mean sacrificing returns. Read more about that here.

In the past, impact investing required you to do a lot of research yourself, and you needed access to closely-guarded information that’s not publicly available.

We’ve made this much easier for you. We’ve streamlined this process into an easy online tool (try it here – free and non-binding! Coming soon for EU customers!).

Here’s a taste of what your Yova strategy can be built around…

Handprint Topics
Renewable Energy Energy-saving Technology Clean Water Circular Economy
Sustainable Forestry Plant-based Food Access to Medicine Disease Eradication
Digital Champions Transport of the Future Swiss Champions Advancing Education
Footprint Topics
Low Carbon Emissions Gender Equality Fair Pay Human Rights
Exclusion Criteria
No Coal or Gas No Nuclear No Pesticides No Alcohol
No Tobacco No Meat No Animal Testing No Weapons


Step 4: Buy your stocks (avoid hidden fees!)

Many people invest in managed funds or ETFs because they believe it’s the only way to participate in the stock market with a small investment amount.

And yes, it’s true that transaction fees can make investing expensive.

Even if you use a low cost ‘Do it Yourself’ provider such as SwissQuote, a well-diversified investment will attract around 520 francs in transaction fees when you invest. That’s a huge loss to stomach on Day One!

Fees of each stock transaction

Swiss Stocks European Stocks America
SwissQuote 9 CHF 25 Euro 15 USD
Yova 0 0 0

With that in mind, it’s easy to see why funds and ETFs seem like a cost-effective alternative.

Unfortunately, these solutions come with their own drawbacks (we detail these in our article ‘ETFs: What you need to know’). A Financial Times investigation also found that several major funds cost more than four times what people think, due to complicated cost structures.

Fees when investing small amountsSource: Financial Times

Step 5: Set up an automatic reinvestment

Assuming you don’t have to pay transaction fees, one of the easiest and most rewarding ways to grow your savings is to set up an automatic payment that regularly adds to your investment.

Let’s say you add 100 francs each month. In Switzerland, that’s the price of a meal out.

As countless behavioural psychologists have noted, you won’t miss that money. Because it automatically moves to your investment account, you never experience the negative emotions around “giving it up”.

Instead, you get extremely positive emotions when your wealth grows substantially.

Assuming the average annual stock market return of six percent, even a small investment in the stock market will double approximately every 12 years.

To be exact, your monthly 100 francs will grow to:

6,949 francs in 5 years.

16,247 francs in 10 years

45,344 francs in 20 years

Importantly, you only pay 24,000 francs out of your own pocket (and over 20 years, you won’t notice it leaving). The remaining 21,344 francs are pure profit.


Step 6: Don’t do anything!

We are big fans of the “buy and hold” approach to investing. This is where you establish a well-diversified portfolio of stocks, and stick with this same investment strategy over time.
As investment magnate Warren Buffett famously said, “my favourite holding period is forever”.
This is based on historical data that shows the stock market has always moved upwards over time, even recovering from all corrections and crashes in history. Let’s take a look at this chart:

Stock Market Values Overtime

Illustration of stock market performance over time

Source: Yova

Some people argue they have special skills and expertise that enable them to increase their profits, by buying and selling stocks regularly. Keen to prove once and for all that “buy and hold” is the best approach, Buffett laid down a challenge in 2007:
He bet $US500,000 that the S&P 500 (an index of major American companies) would outperform the average hedge fund performance over the following decade.

Guess who won?
When the bet finished in 2017, the hedge funds had increased by 2.2 percent each year on average. Meanwhile, Buffett made a 7.1 percent annual gain through the “buy and hold” approach.


How can I invest in the stock market?

At Yova, we provide a way to invest small amounts of money in diversified stock portfolios. The first step is to get your personalised impact investing strategy on our website (coming soon for EU customers!). You’ll see the list stocks we recommend you buy, based on your personal interests and values. This service is completely free of charge and obligation. If you decide to move ahead with your investment, our fees are between 0.6% and 1.2%, depending on the size of your investment. This includes everything – there are no additional costs or hidden fees.


Erik Gloerfeld

Erik Gloerfeld

Founder – Investment platform

Erik has been involved in sustainable business for 7 years. Before founding Yova, he was an independent entrepreneur, launching the 'Lapel & Tie' project and expanding the GreenBuzz initiative.