2 Pitfalls of Fractional Share Investing to Avoid
Fractional shares have been a hot topic recently and with good reason. A growing number of brokerages are now offering the opportunity for those without a lot of money to invest to purchase stocks that have high share prices by buying partial shares instead of full ones.
Purchasing fractional shares is also called dollar-based investing because you don't place an order to purchase a specific number of stock shares, but instead specify the amount you want to invest in a particular company. Some brokerages require you to invest a minimum of $5, while for others you can buy as little as a penny's worth of stock as long as you're buying at least 0.001% of a share.
This new type of trading has democratized investing somewhat and made it possible for anyone to get their money in the market, but it's also created some new risks. To make sure you're trading fractional shares wisely, you'll want to avoid these two big pitfalls.
Source Fool.com
