Would you like to inspect the original subtitles? These are the user uploaded subtitles that are being translated:
1
00:00:00,460 --> 00:00:06,960
Something that's a little newer in investing is fractional shares, and this is fractional shares are
2
00:00:06,960 --> 00:00:12,180
great, you know, fractional shares can be a great way to invest in companies that were really not
3
00:00:12,180 --> 00:00:17,220
available before to regular investors because the cost of buying one of the share of stock was like
4
00:00:17,220 --> 00:00:19,620
over $3000 or something for some of these companies.
5
00:00:20,100 --> 00:00:25,440
But a fractional shares now allow you to invest in them as far as you know, buying a fraction of that
6
00:00:25,440 --> 00:00:26,490
share, basically.
7
00:00:26,730 --> 00:00:30,390
Now there are some pitfalls to watch out for, and we're going to go through the pros and cons at the
8
00:00:30,390 --> 00:00:31,230
very end here.
9
00:00:31,530 --> 00:00:34,950
So you'll decide you know how you want to use fractional shares if you want to at all.
10
00:00:34,960 --> 00:00:37,110
So all that is coming up as far as what we're going to learn.
11
00:00:37,800 --> 00:00:41,540
So the big idea here is sometimes to buy one share stock.
12
00:00:41,550 --> 00:00:45,720
It can be very pricey, so fractional shares simply mean what they say.
13
00:00:45,720 --> 00:00:47,490
It's a first time finance industry.
14
00:00:47,970 --> 00:00:52,350
One of the rare times when it's actually self-explanatory, you're buying a small portion or a fraction
15
00:00:52,350 --> 00:00:53,370
of your share of a share.
16
00:00:53,760 --> 00:00:58,710
You're not buying thirty four hundred dollars worth of Amazon one share, you're buying maybe 10 percent
17
00:00:58,710 --> 00:01:04,110
of that share or three hundred and forty dollars, and you own only a tenth of Amazon, not one full
18
00:01:04,110 --> 00:01:05,730
share of Amazon.
19
00:01:06,120 --> 00:01:11,040
So this is where I believe we live in a golden age in terms of financial technology or fintech.
20
00:01:11,310 --> 00:01:14,850
You know where they give us some using technology to give us some options here.
21
00:01:15,230 --> 00:01:15,450
Right.
22
00:01:15,450 --> 00:01:21,150
So here we look in this example, a single share of Amazon, you know, might cost $3000, but you don't
23
00:01:21,150 --> 00:01:22,650
have a thousand dollars to invest.
24
00:01:22,980 --> 00:01:29,010
Well, you can take, you know, these 11 stocks that you see here, like Netflix, McDonald's and Procter
25
00:01:29,020 --> 00:01:29,360
& Gamble.
26
00:01:29,370 --> 00:01:34,860
All these Nike and including Amazon, and you can invest just a small portion in each one of your thousand
27
00:01:34,860 --> 00:01:35,400
dollars.
28
00:01:35,640 --> 00:01:37,560
And you can the small portion of Amazon.
29
00:01:37,560 --> 00:01:41,650
So if you look at that Amazon the left, that that whole circle is one share.
30
00:01:41,820 --> 00:01:43,920
You're just buying a tiny part of it, right?
31
00:01:44,550 --> 00:01:47,450
If we look an example of that, how does that actually work in practice?
32
00:01:47,460 --> 00:01:49,140
This is from like Robinhood, actually.
33
00:01:50,520 --> 00:01:56,220
And you can choose and not every broker offers this, but many are offering it more than ever now.
34
00:01:56,220 --> 00:01:59,130
So just be aware not everyone offset at this point.
35
00:01:59,340 --> 00:02:02,820
But you can choose to buy in this case in dollars or again, whatever your currency is.
36
00:02:03,060 --> 00:02:05,310
And you could invest a little, said one dollar to vest.
37
00:02:05,310 --> 00:02:09,870
Or you could buy or choose the buying shares and just enter a less than full share amount, right?
38
00:02:09,870 --> 00:02:11,220
So we look at the image on the right.
39
00:02:11,550 --> 00:02:16,290
If you wanted to buy like a S&P 500 ETF, spy is the name of it.
40
00:02:17,010 --> 00:02:18,440
You can start at a dollar, right?
41
00:02:18,450 --> 00:02:23,760
I could buy one dollar on this particular brokerage site, Robinhood, or I could buy shares, and I
42
00:02:23,760 --> 00:02:29,130
could buy zero point zero zero zero zero zero one if I got that right.
43
00:02:29,370 --> 00:02:34,620
You know, so you could buy the small, tiny part of the share without having to buy an entire share.
44
00:02:34,890 --> 00:02:36,210
So we look at an example.
45
00:02:36,510 --> 00:02:41,460
Let's say that stock ABC I made up sells for five hundred dollars U.S. per share.
46
00:02:41,490 --> 00:02:41,760
Right.
47
00:02:41,820 --> 00:02:43,930
You could buy one share at $500.
48
00:02:43,950 --> 00:02:44,100
Right.
49
00:02:44,130 --> 00:02:44,610
Makes sense.
50
00:02:44,940 --> 00:02:49,440
If I wanted to buy half a share, well, it's half the price I'll pay would be 250.
51
00:02:49,680 --> 00:02:51,540
And I have basically a half a share.
52
00:02:51,540 --> 00:02:52,500
I don't have a full share.
53
00:02:52,500 --> 00:02:58,140
I have a half a share 250 or 0.25 B one twenty five point one would be 50.
54
00:02:58,380 --> 00:03:04,320
Or I can go as little as, you know, 0.01 and go down to five dollars and buy a point or one.
55
00:03:04,320 --> 00:03:09,330
You know of that share of that stock, excuse me, could go as low as $1 on this site.
56
00:03:09,690 --> 00:03:16,500
So as you can see, it allows you to buy these fractional shares at a smaller amount and then have a
57
00:03:16,500 --> 00:03:18,810
variety of shares, just smaller amounts of them.
58
00:03:19,260 --> 00:03:20,290
Now you might be thinking, Well, what?
59
00:03:20,490 --> 00:03:21,560
What about dividends?
60
00:03:21,570 --> 00:03:26,640
What if I own a share of a stock of a company that pays a dividend and I get one dividend per share
61
00:03:26,640 --> 00:03:27,090
of stock?
62
00:03:27,090 --> 00:03:28,080
What happens there?
63
00:03:28,380 --> 00:03:31,860
Well, it's the same thing where you're getting a fractional dividend payout.
64
00:03:32,160 --> 00:03:37,860
So if I own one share that equals to one dividend payout, let's say on the algo basis, or let's say,
65
00:03:37,860 --> 00:03:40,530
the dividend going to pay me two dollars or two units, right?
66
00:03:40,830 --> 00:03:43,430
So if I own one, share my dividends too, right?
67
00:03:43,770 --> 00:03:46,410
If I own a half a share, I'm not going to get two.
68
00:03:46,420 --> 00:03:50,730
I'm going to get half of that and I'm going to get one right because I own point five of a share.
69
00:03:51,000 --> 00:03:56,370
So whatever your your your getting in terms of your stock, in terms of what you would have for one
70
00:03:56,370 --> 00:04:01,850
share, you would get a lesser amount if you have a fractional share in this example, 50 percent or
71
00:04:01,910 --> 00:04:02,490
point five.
72
00:04:02,610 --> 00:04:09,540
So it's a great way again to be able to invest in higher cost, higher priced stocks and get some diversification
73
00:04:09,540 --> 00:04:13,890
by, you know, looking at different, different types of companies.
74
00:04:14,190 --> 00:04:15,640
So let's look at those pros and cons.
75
00:04:15,670 --> 00:04:20,610
There are some definite pros and cons So as we mentioned, you get access to more stocks, basically
76
00:04:20,610 --> 00:04:25,160
higher price stocks, you can now access them and it's very low cost and diversify.
77
00:04:25,170 --> 00:04:25,460
Right.
78
00:04:25,480 --> 00:04:30,480
I I if I have, you know, a stock that sells for one thousand and all I have is a thousand, I would
79
00:04:30,480 --> 00:04:35,880
only get one share where now I could get 10 different companies for 100 each, right one-tenth.
80
00:04:36,210 --> 00:04:38,400
So you can get some low cost diversification.
81
00:04:38,880 --> 00:04:43,530
You have less money in cash, so you're more fully invested, which is a good thing if you're more fully
82
00:04:43,530 --> 00:04:47,610
invested because I'm not waiting to build up my cash for that one time.
83
00:04:47,610 --> 00:04:52,860
Once I build up enough to now finally make that stock purchase of one share, I can be more fully invested
84
00:04:52,950 --> 00:04:55,710
with a lot of different stocks with fractional shares.
85
00:04:56,040 --> 00:04:58,140
And it works well for automated investing, too.
86
00:04:58,740 --> 00:04:59,670
Well, let's say every month.
87
00:04:59,970 --> 00:05:04,950
I spend a certain amount to my broker, and I've decided I wanted to be have an equal amount bought
88
00:05:04,950 --> 00:05:06,390
between these 10 different companies.
89
00:05:06,660 --> 00:05:07,950
They'll just automatically do it.
90
00:05:07,950 --> 00:05:12,340
I can make that all automated and in fractional shares work with that as well.
91
00:05:12,360 --> 00:05:13,560
So a lot of good pros there.
92
00:05:13,770 --> 00:05:16,230
Let's talk about some cons now of fractional shares.
93
00:05:16,890 --> 00:05:17,220
One.
94
00:05:17,220 --> 00:05:19,770
Fractional shares converge more active trading, right?
95
00:05:19,800 --> 00:05:21,420
I mean, that could be a good thing.
96
00:05:21,420 --> 00:05:22,290
It could be a bad thing.
97
00:05:22,290 --> 00:05:23,240
It all depends on you.
98
00:05:23,250 --> 00:05:27,390
You know, if you're getting more fees and things, especially around, if you're getting charged per
99
00:05:27,390 --> 00:05:32,420
trade, you know, more active trading can incur more feeds, which can encourage overall profitability.
100
00:05:32,430 --> 00:05:33,840
So something to watch for with that.
101
00:05:34,800 --> 00:05:36,690
Also, a lot of times are fractional shares.
102
00:05:36,700 --> 00:05:42,420
You have a very limited selection of assets, maybe only certain stocks, maybe only large company stocks
103
00:05:42,420 --> 00:05:47,760
or certain ETFs or exchange traded funds or certain types of cryptocurrency, but not all of them.
104
00:05:47,970 --> 00:05:52,980
As an example, maybe no crypto, you know, so you might find that there's a limited selection of different
105
00:05:52,980 --> 00:05:55,230
types of assets or securities that you can invest in.
106
00:05:56,100 --> 00:06:03,140
We can reduce your liquidity in terms of how fractional shares, trade shares trade in units of one
107
00:06:03,810 --> 00:06:07,110
and more commonly in units of what are called run lots of 100.
108
00:06:07,230 --> 00:06:08,970
That's typically how they trade.
109
00:06:08,980 --> 00:06:11,220
So if you have a fractional share, they have to.
110
00:06:11,820 --> 00:06:15,240
When the brokers is matching up, you know, buyers and sellers, they've got to kind of pull these
111
00:06:15,240 --> 00:06:20,220
different fractional shares together, you know, to start making it into one full share and maybe up
112
00:06:20,220 --> 00:06:22,890
into 100 shares to start doing some of these transactions.
113
00:06:22,900 --> 00:06:25,140
So what that means is you're fractional.
114
00:06:25,140 --> 00:06:30,600
Shares may not trade as fast or as quickly or reduce liquidity is what all that means.
115
00:06:30,810 --> 00:06:31,350
It may not.
116
00:06:31,470 --> 00:06:35,220
They may not trade as fast as something that is more of full shares.
117
00:06:35,220 --> 00:06:36,990
They'll trade slower than full shares.
118
00:06:37,350 --> 00:06:41,550
And again, as we mentioned, not every broker offers fractional shares, so you can enjoy the pros,
119
00:06:41,550 --> 00:06:44,340
let alone the cons, because they don't offer it.
120
00:06:44,340 --> 00:06:45,480
But it's something to watch for.
121
00:06:45,690 --> 00:06:49,920
More and more brokers are offering this because this is something that's being really driven by customer
122
00:06:49,920 --> 00:06:54,630
demand because a lot of customers of theirs want this and they'll leave for other brokers if they don't
123
00:06:54,630 --> 00:06:55,150
provide it.
124
00:06:55,170 --> 00:06:58,110
So you're seeing a lot more low costs on trading.
125
00:06:58,350 --> 00:07:03,090
You're seeing a lot more free type trading and you're also seeing a lot more fractional shares plus
126
00:07:03,090 --> 00:07:08,280
better support, plus better tools being offered by the brokers sites as they all compete with each
127
00:07:08,280 --> 00:07:08,540
other.
128
00:07:08,550 --> 00:07:12,510
So there are some pros and cons in terms of fractional shares.
129
00:07:12,810 --> 00:07:14,070
And just be aware of that.
130
00:07:14,110 --> 00:07:16,650
If you're already with a broker, go check it out, see if they offer it.
131
00:07:16,650 --> 00:07:19,140
If not, this sounds interesting to you.
132
00:07:19,620 --> 00:07:24,240
Keep going with the chorus, but you might want to start exploring companies that might offer fractional
133
00:07:24,240 --> 00:07:24,780
shares.
134
00:07:24,960 --> 00:07:29,550
Brokers I'm now for fractional shares because that might be a great way for you to start getting in
135
00:07:30,390 --> 00:07:33,420
to some of these companies and some of these stocks with less money.
13645
Can't find what you're looking for?
Get subtitles in any language from opensubtitles.com, and translate them here.