It is undeniable that the allure of owning shares in blue-chip giants like META, NFLX, or AMS is enticing. These companies represent the innovation in the market, often delivering consistent returns and embodying market leadership.
However, the high price per share has put direct ownership out of reach for many investors with smaller portfolios. That's where fractional shares come into play. Simply put, trading in fractions let you buy a small piece of a stock rather than the whole share. This means you can invest in these high-priced stocks without needing a lot of money upfront. It's an affordable solution that opens the door for people with smaller portfolios to own a slice of the big players in the market.
What are blue-chip stocks, and why are they tough to buy?
Blue-chip stocks are shares of large, well-established companies with a history of reliable performance. They are often included in major market indices like the Dow Jones Industrial Average (DJIA). Examples of blue-chip companies might include large multinational corporations like Apple, Coca-Cola, IBM, and Microsoft.
They're like the all-stars of the stock market—healthy business management and often come with a solid reputation, which attracts more investors to buy these stocks to gain profits.
However, investment involves risk and investing in them can be challenging:
High Price Per Share: Stocks like COKE and TDG can cost thousands of dollars for just one share. That's a big chunk of change for most people and can be a major barrier to entry.
Market Timing Risks: Putting a lot of money into a single expensive stock all at once can be risky. If the stock's price drops after you buy, you could face significant losses.
Psychological Barriers: Investing a large sum into one stock can be scary. People might worry about the potential ups and downs and feel hesitant to take the plunge.
These factors can make it difficult for small investors to get a foot in the door with blue-chip stocks, even though they might love to own a piece of these influential companies.
How do fractional shares make investing easier?
Under such circumstances, fractional shares let you buy just a small piece of a stock. This means that instead of needing $3,000 to buy a single share of a stock, an investor can decide how much they want to invest—be it $5, $50, or $500—and receive a corresponding fraction of a share.
As a result, it brings several benefits:
Affordable Entry Point: Fractional shares allow investment with a small amount of money, making it possible to invest in blue-chip stocks. Ownership may also provide dividends, depending on the number of fractional shares held
Diversification: Fractional shares enable you to diversify your holdings in the US stock market easily. You can spread your investments across various sectors and companies, mitigating risks associated with concentrating your portfolio.
Flexibility: Fractional shares lower financial barriers, allowing access to investments in companies of interest, no matter the stock price.
Introducing Tiger Trade: your gateway to investing fractional shares
Tiger Trade makes it simple and convenient to buy US shares. We have several strengths to aid your decision-making:
Invest in US Giants Starting from $1: With $1, you can invest in major U.S. corporations. This significantly lowers the investment threshold, allowing anyone to begin building a portfolio of blue-chip stocks.
Free Real-Time Quotes: With Tiger Trade, you can stay informed with free access to real-time market data, making investment decisions based on up-to-the-minute information without the extra costs.
Low Commission Fee: Tiger Brokers’ fee on trading fractional shares is low, with commission waivers for trades under one share and a 1% platform fee (capped at $1).
Disclaimer:
The information expressed herein is current and does not constitute an offer, recommendation or solicitation, nor does it constitute any prediction of likely future performance. Investment involves risk. The price of investment instruments can and do fluctuate, and any individual instrument may experience upward or downward movements, and under certain circumstances may even become valueless. Past performance is not a guarantee of future results. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any person or affiliated companies. Please read the disclosure statements and terms on our website and consider whether obtaining or continuing to hold financial products is suitable for you before opening an account or making investment decisions. Before making an investment decision, you should speak to a financial adviser to consider whether this information is appropriate to your needs, objectives and circumstances. Tiger Brokers (Singapore) Pte. Ltd. assumes no fiduciary responsibility or liability for any financial consequences or otherwise arising from trading in investment instruments if opinions and information in this document may be relied upon. This advertisement has not been reviewed by the Monetary Authority of Singapore. Tiger Brokers (Singapore) Pte. Ltd. (Reg. No. 201810449W).