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. Is buying bonds on the secondary market safe with what the market is doing?

  2. 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 >>
  3. What is the difference between the bond market and the stock market?

    The bond market is where investors go to trade (buy and sell) debt securities, prominently bonds. The stock market is a place ... Read Answer >>
  4. 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 >>
  5. Why have mutual funds become so popular?

    Learn why mutual funds are such a popular investment option, including the advantages of diversification, customizability ... Read Answer >>
  6. Are mutual funds better than single stocks?

    Learn the advantages of investing in mutual funds over investing in individual stocks. These advantages include reduced risk ... Read Answer >>
Related Articles
  1. Markets

    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. Managing Wealth

    Why and How to Diversify Beyond Asset Class

    Diversification is a must for investment portfolios but it isn't enough. Investors have to have different exposures within asset classes.
  3. ETFs & Mutual Funds

    Bond Funds Boost Income, Reduce Risk

    These funds can provide stable returns for those who depend on their investment income.
  4. ETFs & Mutual Funds

    The Top 5 Equity Mutual Funds for 2016

    Understand how equity securities can enhance an investor portfolio, and discover the five best equity mutual funds to consider for 2016.
  5. Markets

    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.
  6. ETFs & Mutual Funds

    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.
  7. ETFs & Mutual Funds

    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.
  8. Managing Wealth

    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.
  9. Managing Wealth

    High-yield Bond Investing: Information Is Key

    Access to and analysis of relevant information are the key to success in the high-yield bond market.
  10. ETFs & Mutual Funds

    A Fresh Look At The Financial Markets

    Different markets provide unique opportunities and risks for investors. Find out more here.
RELATED TERMS
  1. Secured Bond

    A type of bond that is secured by the issuer's pledge of a specific ...
  2. Security

    A financial instrument that represents an ownership position ...
  3. Pooled Funds

    Funds from many individual investors that are aggregated for ...
  4. Bond Rating Agencies

    Companies that assess the creditworthiness of both debt securities ...
  5. Bond

    A debt investment in which an investor loans money to an entity ...
  6. Reverse Convertible Bond - RCB

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

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center