Ritika Dubey, The Canadian PressThe S&P TSX composite index screen at the TMX Market Centre in downtown Toronto is photographed on Friday, November 11, 2022. When an attractive tech stock seems out of budget, fractional trading can help fulfil that dream of owning a piece of the company — a small portion at a time. THE CANADIAN PRESS/ Tijana Martin
Young people in particular sometimes shy away from starting to invest because they don’t have large quantities of money set aside. Boisvert recalled being fearful of investing in the stock market in her 20s because of that very reason. “The idea is you can start investing with less money, you can buy stocks that maybe were seen as expensive,” Boisvert said.
If an investor bought 50 per cent of a share, the fraction of the dividend will be equivalent to that proportion, pro-rated to the ownership of that stock. Likewise, the weight of the vote is pro-rated to the fractional share, Marques explained. “Although it makes easier to do so fractionally with a smaller budget, that takes a lot of research,” Marques said.
For instance, if you have a goal to put a down payment on a home in the next year, the investor shouldn’t be putting that money into equities that can be volatile in the short-term, she explained.