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.



Filed Under:

comments powered by Disqus
Trading Center