“The key to making money in stocks is not to scared out of them” – Peter Lynch
Fractional shares make it easier for people from all financial backgrounds to invest. The key to becoming an experienced investor is consistency. Practice makes perfect. However, it can be hard to stay consistent when some of the top stocks range from $100-$1,000+ in price.
What is a fractional share?
Investopedia defines a fractional share as less than a full share of a company. Robinhood describes its fractional shares as pieces, or fractions, of whole shares of a company or ETF. Fractional share investing can benefit beginner investors by helping expose them to the world of stock ownership.
Fractional Share Investing
If a new or young investor wants to invest but has limited funds, fractional shares are the perfect solution. As stated above, Fractional share investing allows investors to purchase a portion of a whole share. For example, one share of Tesla stock cost $769. If an investor only has $500 to spend but wants to purchase a Tesla stock, they would not be able to. However, with fractional share investing, they would be able to buy a portion of the Tesla stock and own a piece of a company they like.
How to purchase fractional shares
Several mobile apps enable investors to purchase fractional shares. Brokerage firms like Fidelity Investments, Betterment, Robinhood, and Acorns allow investors to buy shares of companies at a fraction of the price. Partial ownership is better than no ownership at all.
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