Why Fractionalized Investing Is The New Diversified Portfolio
>> This article is for informational purposes only and is not financial advice. The information does not constitute investment advice or an offer to invest.
If an individual is interested in taking on investing, jumping directly into the stock market can be difficult, due to intimidation and the high required minimums. The initial perception floating around the industry is that in order to reap any benefits from investing, an individual will need thousands of dollars.
Luckily, the opposite is true- fractionalized investing is empowering potential investors with access to stocks and assets that were previously thought to be completely out-of-reach. Fractionalized investing is gaining so much popularity, that some even say it’s the new diversified portfolio.
This is a breakdown of fractionalized investing, and how it’s beginning to significantly change the investment landscape.
Fractionalized investing has also been described as partial shares, and this is a good way to consider the basics. Effectively, a single share or asset can be split between investors as a result of actions such as tokenization, stock splits or dividend reinvestment plans, allowing investors to own a fraction of a share.
This practice enables investors to purchase smaller portions of various asset classes, which have a high single-share price, at a lower entry point — essentially giving investors looking to get exposure to the market without investing a lot of capital.
Some fractional shares are part of plans where the dividends that the investor receives are automatically reinvested to buy more shares, or bigger asset ownership portions. This is based on the current market price, while growing the investor’s total stake with minimal additional effort.
This type of investing is becoming particularly common when it comes to higher-priced stocks.
The first benefit of fractionalized investing is being able to invest in companies that were previously unaffordable, allowing investors to enjoy a small portion of their overall success. This method is also more welcoming to new investors, who can gain exposure to larger stocks, which typically trade at higher values.
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Disclaimer: Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. This article is for informational purposes only, and is not financial advice. The information does not constitute investment advice or an offer to invest.
Published at Tue, 23 Jul 2019 04:12:58 +0000
Bitcoin Pic Of The Moment
Bitcoin, the Free Coin – Conference by JaromilRegional Museum of Natural Sciences of Turin, nov 10 – 2012. www.neural.it/art/2013/04/open_your_city_share_festival.p…
By neural.it on 2013-04-13 18:03:51
