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Do you want to invest in Top companies with Fractional shares?
Have you ever heard for Tesla, Apple, Amazon, Toyota, Honda, or Alibaba: What do these companies have in common?
They are global leaders in their respective fields.
It’s no wonder if you want to add these stocks in your investment portfolio. The shares of Amazon alone have witnessed 5x growth in the last five years.
However, most retail investors may find it slightly expensive to buy individual shares of these global leaders. At the time of writing this post, Amazon was trading at over 360,800ksh ($3,319), whereas Tesla was trading at 48,270ksh ($444).
Enter Fractional Shares.
Fractional shares allow retail investors to purchase a small fraction of these shares, which means you don’t need a huge investment to add the top global companies to your investment portfolio.
We have created this guide to help you understand how fractional shares work, their benefits, and whether they are suitable for you or not.
Let’s get started!
As the word sounds, fractional shares are smaller portions of a share. It isn’t uncommon to find a share split into two decimal points or even small fractions.
What a fractional share does is that it allows new investors to own a small portion of a share. For instance, instead of purchasing 1 full share of Apple, you can buy a 0.1 or 1/10th part of a share.
Fractional shares provide the flexibility to invest as much as you want in a company instead of having to invest the minimum share price.
Fractional shares have the potential to democratize stock markets. People who never had access to expensive or highly-priced shares can start investing in the top companies.
If you want to invest through fractional shares, here is what you need to do.
The ability to invest in some of the best global companies sounds exciting, but that doesn’t mean that you should purchase any share without proper analysis.
Trading and investing in fractional shares follow the same investment principles. You have to make sure that you understand the fundamentals of the company, its recent growth, and financial projections.
Additionally, purchasing fractional shares could incur higher transaction charges (as you may buy shares multiple times), which makes it suitable for long-term investing only. If you’re planning to create a portfolio for long-term growth, fractional shares are ideal for you.
If you’re investing for dividend income, fractional shares may not be a suitable match for your portfolio.
How much can I invest in fractional shares?
With as low as $100, you can begin accumulating stocks of your favorite brands such as Apple & Tesla. Stock trading is a continuous journey where you meet your investment goals by depositing more funds and accumulating more stocks as you re-invest profits.
Fractional shares are bringing stock markets to retail investors. The traditional barriers to entering stock markets are being put away through fractional share investing. If you are aware of the risk involved in trading global shares and understand the necessary market movements, fractional shares can open several new opportunities for you.
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