On Bumper, you can invest in your favorite companies with just $1. But how? Stocks like Apple or Tesla cost hundreds of dollars. Well, have you heard of fractional shares?
Fractional shares give investors the ability to purchase a fraction of a single share. Instead of buying one share of ABC company for $20, you can choose to invest $10 into ABC company and own half of a share.
With fractional shares, you will earn a proportion of the gains and dividends distributed. Continuing from the example above, if ABC company’s stock increases $10 and distributes $5 in dividends a share over a year, you will only earn $5 in gains and $2.5 in dividends since you own only half a share.
The ability to buy small pieces of a stock can help you diversify at a much lower cost. You no longer have to buy 10 different stocks that cost an arm and a leg. You can diversify with just a few dollars. Also, you have so many more choices of stock to choose from. A stock’s price is no longer a barrier as you begin investing!
Alright, I think you get it. Fractional shares are like breaking a dollar into nickels and dimes. Now that we get the small picture, let’s move on to the big picture, stock indexes.