Penny Stocks or Fractional Shares? Where to Invest Just a Few Dollars at a Time
Investing isn't just for wealthy people -- although the share prices of Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) might indicate otherwise. In truth, you can build a growth-oriented investment portfolio even if you only have $10 a month to spare. Two low-dollar options are penny stocks, which have been around as long as stock markets have, and fractional shares, which are a relatively new development in the financial industry.
Penny stocks trade for less than $5 per share. Some are traded on the major stock exchanges, like the NYSE, but many are traded directly between buyers and sellers in what's called the over-the-counter (OTC) market. Fractional shares are a different thing entirely. These are portions of full stock that shares that you buy for a portion of the full stock price. In other words, if Apple's $320-plus price tag is too high for you, you could buy a fraction of it. One-quarter of an Apple share would cost you 25% of the full share price, or around $80.
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Source Fool.com
