A:

Assuming the question primarily relates to the issuers of stocks and bonds, the simple answer is no. There are no regulatory limitations for investors regarding the dollar amount, number of securities, or the number of issuers for stocks and bonds. However, there are obviously practical limitations of effective investment management for the individual investor as opposed to professional and institutional investors. The latter can easily undertake financial assets under management in the billions of dollars from hundreds, if not thousands, of issuers.

Most likely, a non-professional individual investor should limit his/her direct stock investing to around 15 companies, which can provide for a manageable, diversified equity portfolio. Mutual funds, with their professional management and inherent diversification, offer a convenient alternative to direct investing and are are particularly appropriate for individual investors investing in bonds.

The only limitations an investor would have for buying a particular security would be the size of his/her bank account, as well as the number of shares that are issued and outstanding. In the case of a company's stock, the Securities and Exchange Commission requires an investor to file Form 3 (initial statement) and Form 5 (annual statement) if he/she owns more than 10% of any class of equities. These filings are for information purposes and do not subject a stock purchase or holding to any limitations.

To find out more, see our Investing 101, Stock Basics and Mutual Fund Basics tutorials.

RELATED FAQS
  1. What are the advantages and disadvantages of buying stocks instead of bonds?

    This is a common question among investors. Stocks and bonds differ dramatically in their structures, payouts, returns and ... Read Answer >>
  2. Why would a person choose a mutual fund over an individual stock?

    There are a number of reasons why an individual may choose to buy mutual funds instead of individual stocks. The most common ... Read Answer >>
  3. Who are the key players in the bond market?

    The bond market can essentially be broken down into three main groups: issuers, underwriters and purchasers. The issuers ... Read Answer >>
Related Articles
  1. Financial Advisor

    7 Questions to Consider Before Investing in Bonds

    There is a significant number of questions every investor, private or institutional, should consider before investing in bonds.
  2. Investing

    Bond Funds Boost Income, Reduce Risk

    These funds can provide stable returns for those who depend on their investment income.
  3. Investing

    Why Bad Bonds Get Good Ratings

    Credit ratings are not the only tool to rely on when assessing bonds. Find out why they sometimes fall short.
  4. Investing

    The Top 5 Short-Term Bond Funds for 2016

    Learn how short-duration bonds can add value to an asset allocation strategy, and discover the top five short-term bond funds for 2016.
  5. Investing

    Investing in High-Yield Corporate Bond Funds

    High-yield corporate bond funds provide an interesting investment option, particularly for private investors chasing returns and a broad diversification.
  6. Investing

    Common Bond-Buying Mistakes

    Avoid these errors made daily in bond portfolios everywhere.
  7. Financial Advisor

    Advising FAs: Explaining Bonds to a Client

    Most of us have borrowed money at some point in our lives, and just as people need money, so do companies and governments. Companies need funds to expand into new markets, while governments need ...
  8. Investing

    Alternative Investments: How The Game Has Changed for Retail Investors

    Learn how retail investors are using liquid alternative investments to diversify their portfolios. These funds are not correlated with stocks and bonds.
  9. Investing

    The Benefits of Picking Mutual Funds Over Individual Stocks

    Learn about the advantages of investing in mutual funds rather than individual stocks, including the benefits of affordability, oversight and diversification.
RELATED TERMS
  1. Issuer

    A legal entity that develops, registers and sells securities ...
  2. Call Provision

    A provision on a bond or other fixed-income instrument that allows ...
  3. Security

    A financial instrument that represents an ownership position ...
  4. Bond Rating Agencies

    Companies that assess the creditworthiness of both debt securities ...
  5. Exchangeable Security

    An investment instrument that grants its holder the right to ...
  6. Reverse Convertible Bond - RCB

    A bond that can be converted to cash, debt or equity at the discretion ...
Hot Definitions
  1. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
  2. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  3. Tax Refund

    A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount ...
  4. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced within a country's borders in a specific time period, ...
  5. Inflation

    The rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of ...
  6. Merchandising

    Merchandising is any act of promoting goods or services for retail sale, including marketing strategies, display design and ...
Trading Center