The basic explanation of “fractional shares” is that fractional shares allows you as a investor to buy a portion of a stock. At the same time making it easier to diversify even with small amounts of money. Which isn’t so bad idea to look into if you are a beginner with not so much money.
Fractional shares are available through couple online brokerages which could be an affordable way for you to get started in a smart way with not a lots of money.
Fractional shares is a life saver if you want to buy pricey stock but don’t want to invest all your savings in a single company or industry.
Fractional shares as I said above lets you as an investor to buy based on a dollar amount you select rather than the price of a whole share which sometimes can be in thousands.
By using fractional shares might be to a huge advantageous for individual investors who are investing a limited capital but still want a highly diversified portfolio. Which is highly recommended to have.
You might use fractional shares for stocks which you cant afford if you are just starting out and you dont want to start with buying stocks in Amazon which costs over 3 thousand. (May, 2021).
By using fractional shares you will be able to build your portfolio you want but possible cant afford just now. Fractional trading lets you buy the amount of stocks you want and can afford. No matter if the stock cost $1, $500 or $5,000 per share.
If you have looked into the stock market lately you would have noticed that the most popular stocks are some of the most expensive once as well. Like Tesla, Apple, Amazon and Microsoft. And investing in every single one of these would normally take couple of thousands to buy a few shares of each. But fractional shares, you can allocate a certain amount of your money toward each company you want to invest in with only 10% of these thousands.
Let me say it again fractional shares helps you build a much more diversified portfolio for a smaller money amount than if you would invest normally without using fractional shares.