A fractional share is less than one whole share of a company. It is an outstanding feature offered on LiveTrade App which allows you to purchase stocks based on the money you want to invest.
With fractional shares, you can invest in stocks that normally cost hundreds or thousands of dollars per share for as little as $1. This gives you the flexibility to invest as much as you want in the companies you believe in, or dip your toe in this market without spending on only entire share. Because you are not obligated to purchase full shares, you can diversify your portfolio with smaller sums of money.
Benefits of Fractional Shares
- Start investing with smaller amounts of money. If you’re just getting started and don’t have a huge sum of money to invest, fractional shares can make a big difference. They allow you to jump right into the market and start reaping the benefits of compounding gains sooner.
- Diversify your portfolio with less money. Diversification is one of the most important aspects of portfolio construction. LiveTrade App’s fractional investing allows you to acquire a large number of shares for $1 so you may be able to purchase broader selections of stocks than usual.
- Manage risks conveniently. Investors can also benefit from fractional shares in terms of risk management thanks to smaller financial requirements for each stock. By owning a variety of different stocks, you can lessen the risk of losing money if any stock tanks.
- Better dollar cost averaging options. With dollar cost averaging, you invest a specific amount of money on a monthly basis. When compared to purchasing all of your shares at once, this may allow you to pay less per share over time.
Downsides of Fractional Shares
- Limited selection of stocks: Not every stock is available for fractional investing. You might not be able to have a large portfolio as you could if you bought whole shares.
- Liquidity: Fractional shares may not trade as rapidly as whole shares because not all of them are in high demand. Brokers may wait for enough fractional orders to accumulate before buying whole shares, slowing order filling. To provide better benefits for users, LiveTrade App allows instant fractional stock trading, ensuring the maximum profit they can earn.
- Shareholder rights: Fractional shares generally do not have voting rights. When you own a fractional share, the inability to vote can be inconvenient because you may not feel fully invested or appreciated as a shareholder by the company.
- Transfers: Some brokers refuse to let you transfer fractional shares to other brokers. Instead, they transfer any full shares and sell the fractional portions to you in exchange for cash. This may just be a little inconvenience, as you may be able to easily repurchase shares at your new brokerage.
How to Buy Fractional Shares
Many online brokerage platforms sell fractional shares, including Fidelity, Charles Schwab and Robinhood. Fractional shares are also available through investing apps such as LiveTrade App, Stash, and Cash App Investing. Depending on the brokerage, you may be required to purchase at least $1 or up to $5 in fractional stock. However, not all stocks available for purchase on an investing platform are available in fractional shares.
If you want to buy fractional shares, compare online brokerages and investing apps before signing up. Take a look at the list of stocks that are available as fractional shares as well. Before investing, make sure you fully understand your brokerage’s fractional share policies as well as the pros and cons of buying portions of shares.
Finally, ensure that there are no additional commissions or fees for investing in fractional shares. Fractional share purchases are typically made in smaller dollar amounts so fees could significantly reduce your returns.
Just a reminder: LiveTrade App offers a stock portfolio of Vietnam’s leading companies, allowing you to buy your favorite stocks in fractional investment. With LiveTrade App, you can trade fractional shares in real time and without paying any commissions. For more information, please visit: https://livetrade.vn/