

As always, do your own due diligence on which stocks and investing strategies work best for you. Keep in mind that a high price per share does not necessarily mean that stock is an amazing investment. And in the long term - over decades - you gain more wealth as these small differences add up. In the above example, with XYZ trading at $100.25, you can now buy 9.97 shares. So brokers have done away with the formality of whole-numbered shares, and investors can now buy fractions of shares. But now there's no need for a piece of paper to buy stocks. This is because, in the days of physical shares, it was impossible to “split” a share.

If you use robo advisors to automate your investments, M1 and Betterment are the leading platforms for fractional share investing.įor example, if you have $1,000 and your favorite company, XYZ, is trading for $100 a share, you can buy ten shares.īut what happens when it's trading for $100.25? The amount you want to invest divided by the stock price determines how many shares you can buy. Normally when you want to invest your money in a stock you like, you decide how much you want to invest in that stock, log onto your broker's website and see how many shares at that price you can buy with that amount.
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