4 Reasons to Use Fractional Shares Instead of Penny Stocks
The dream of winning at penny stock investing has long been part of market folklore, popularly depicted through a Sopranos-style "Webistics" scheme or a strip mall boiler room operation. The desire to own shares of very inexpensive stocks to see their value double overnight is much akin to the thought of buying a winning PowerBall ticket -- and is also riddled with emotional distortions that strand the buyer far from true investing.
Penny stock investing can seem like a reasonable way to own a significant number of shares of a particular company, given that stocks like Amazon now trade at $3,000. However, there are a number of ways to gain exposure to reputable companies, even if you can't afford whole shares. Fractional shares should be preferred to penny stocks, particularly from a risk mitigation standpoint.
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Source Fool.com