Start investing with just $100

Today, I read an article from MS Money, which I set up last night to monitor and manage my cash flows.

It talks about diversifying a portfolio even with small amount of money. The main idea is buying ETFs which are:

• Vanguard Total Stock Market VIPER (VTI, news, msgs), which tracks the Wilshire 5000, an index of approximately 6,500 U.S-based stocks. It’s like buying virtually the entire stock market.

• iShares MSCI-EAFE (EFA, news, msgs), which corresponds to the Morgan Stanley index of stocks trading in Europe, Australia and the Far East.

• iShares Lehman Aggregate Bond (AGG, news, msgs), which attempts to track the price and yield performance of the total U.S. investment grade bond market.

• iShares Dow Jones US Real Estate (IYR, news, msgs), which holds a basket of 75 real estate investment trusts (REITs) that represent that sector of the U.S. economy.

• iShares Dow Jones US Basic Materials (IYM, news, msgs), which includes stocks in the energy, basic materials and precious metals sectors. (Once your portfolio reaches a total value of at least $25,000 — and it will! — you’ll want to switch your commodity allocation to the PIMCO Commodity Real Return Strategy fund (PCRDX), which more accurately captures the returns of the commodity futures market than a collection of stocks can. The fund has a minimum initial investment of $2,500, which makes it impractical for smaller accounts.)

To keep your expenses as small as possible, he recommends to use ShareBuilder.

Well, let’s start. I think that sooner would be better.