At this point, many brokerage accounts offer investors the option to buy fractional shares. Does your brokerage account offer fractional shares?įractional shares are a fairly new thing, and they've become more commonplace over the past few years. But with fractional investing, you can spread out your money without having to pass on the opportunity to own the stocks you want. In fact, the danger in buying expensive stocks is tying up a lot of money in what could be a single share. You could instead buy a third of a share for about $500. If your brokerage account, however, lets you buy shares on a fractional basis, you don't necessarily have to spend $1,500 to buy Chipotle stock. But at roughly $1,500 for a single share, that might be a stretch for you financially.

You may decide to invest in some restaurant stocks, and you might land on Chipotle. Let's say you own a bunch of tech, energy, and healthcare stocks, and you decide you want to branch out into different market sectors. That's because pricier stocks won't necessarily be out of reach.

What makes fractional investing so valuable is that it can really set the stage for a nice, diverse portfolio. And if that company pays a quarterly dividend of $40, you'd get a $20 payment. If you own half of a share, you'll profit to the tune of $50. So, let's say you invest in a company whose share price increases by $100 apiece.

In exchange, you get partial ownership and partial benefits. But nowadays, you can invest in the most expensive companies with limited funds thanks to fractional shares.įractional shares allow you to buy a piece of a share of stock rather than invest in a full share. Bonus Offer: Score up to $600 when you open this brokerage accountĭiscover: Best online stock brokers for beginnersįor years, investors who wanted to own stocks had to either wait until they could afford to purchase a full share at a minimum or pass on the opportunity.

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