While it’s not micro-investing per se, $50 is not a sizeable enough sum to be considered “capital” for any significant investment. But that doesn’t mean investing small sums of money in stocks is not a smart practice.
Several small investments combined can reap large benefits (given enough time), and they also allow you to get more “practice” investing. You can invest small sums in test-case stocks and, based on their performance, grow your position for better returns.
And if you have $50 to invest, there are three stocks that you should look into.
A real estate stock
If you are looking for an overvalued but powerful growth stock that’s currently trading in single digits (so you can buy multiple units with $50), StorageVault (TSXV:SVI) might be the perfect fit. This niche real estate stock has grown to become one of the largest companies currently trading on the Venture Exchange and doesn’t suffer from the characteristic volatility of junior exchange stocks.
The success of this stock can be chalked up to its asset-class focus. StorageVault operates through multiple brands; all are focused on one thing: storage spaces. This asset class is almost always in need and, as per StorageVault’s internal research, has climbed up steadily at a better pace than most other real estate classes. It’s certainly reflected in the capital-appreciation potential of the company, with a 10-year CAGR reaching 41.2%.
It’s trading at $6.25 per share at the time of writing this, so you can buy about eight units with $50.
A tech stock
A2Z Smart Technologies (TSXV:AZ) is not a consistent growth stock like StorageVault. It’s also not very old stock, as it started trading on the Venture Exchange at the end of 2019. The stock saw a stagnant 2020 and didn’t even spike post-pandemic with the other tech stocks, most likely flying under the radar. It did, however, climb 494% between Jan. and Feb. 2021 in fewer than 30 days.
The stock has come down a long way from that peak, and it’s not trading what we can consider its “fair” value. But the potential to spike (under the right market conditions) is still there. And if you invest $50 in the company and it spikes again in, say, two or even three years, you could grow your capital anywhere between four or five times. That’s better capital appreciation than many consistent growth stocks offer, albeit less certain.
A gas-purification company
While the term “gas purification” is quite accurate, considering the product range of Xebec Adsorption (TSX:XBC), it doesn’t fully encapsulate what the company is about, nor the company’s potential. Xebec, thanks to its focus on cleaning natural and biogas (among other things) from their impurities, has the potential to emerge as a powerful player in the overlapping markets of renewables and hydrogen.
The company has already overseen 250 hydrogen installations to date, and one of its subsidiaries is a well-known name in the on-site hydrogen production space, which can be a huge asset to the hydrogen economy taking off. Xebec’s product/solution range can also help major industries, especially in the energy space, improve their ESG profiles.
The company is currently trading at a share price of $3.48 per share. It was a great growth stock before the pandemic, and the post-pandemic spike disrupted its usual growth pattern. But it seems to be back on track.
All three companies have the potential to grow your capital at a decent pace, given enough time or the right circumstances. So, make sure you grow your position in a way that’s proportional to the growth you want to achieve with these stocks. They are great picks for those learning to invest as well as the veterans.