Okay, so I left off last time briefly mentioning fractional shares. Now, I hope to delve into the concept of fractional shares and how important it can be in your online investing and mechanical strategies. Below is a quick comparison of how one would need to invest $10k at a traditional broker and then one would invest the same $10k at FolioInvesting. (Note: With the rounding of shares at a traditional broker, you will have to sort through and reduce some shares to get it down below $10k invested.)
| Traditional Broker | FolioInvesting | ||||||
| Company Name | Ticker | Price | Shares to Buy | Cost | Shares to Buy | Cost | |
| TJX Cos. | TJX | $ 42.03 | 12 | $ 504.36 | 11.89626 | $ 500.00 | |
| FOMENTO ECONOMICO MEX | FMX | $ 44.12 | 11 | $ 485.32 | 11.33273 | $ 500.00 | |
| Intuitive Surgical Inc. | ISRG | $ 324.85 | 2 | $ 649.70 | 1.53917 | $ 500.00 | |
| Family Dollar Stores Inc. | FDO | $ 38.08 | 13 | $ 495.04 | 13.13025 | $ 500.00 | |
| Tiffany & Co. | TIF | $ 38.58 | 13 | $ 501.54 | 12.96008 | $ 500.00 | |
| Advance Auto Parts Inc. | AAP | $ 50.28 | 10 | $ 502.80 | 9.94431 | $ 500.00 | |
| Guess? Inc. | GES | $ 31.56 | 16 | $ 504.96 | 15.84284 | $ 500.00 | |
| Endo Pharmaceuticals Holdings Inc. | ENDP | $ 22.10 | 23 | $ 508.30 | 22.62443 | $ 500.00 | |
| Tupperware Brands Corp. | TUP | $ 40.09 | 12 | $ 481.08 | 12.47194 | $ 500.00 | |
| Thoratec Corp. | THOR | $ 43.54 | 11 | $ 478.94 | 11.48369 | $ 500.00 | |
| Waddell & Reed Financial Inc. | WDR | $ 22.55 | 22 | $ 496.10 | 22.17295 | $ 500.00 | |
| Nu Skin Enterprises Inc. Cl A | NUS | $ 25.22 | 20 | $ 504.40 | 19.82554 | $ 500.00 | |
| UMB Financial Corp. | UMBF | $ 35.95 | 14 | $ 503.30 | 13.90821 | $ 500.00 | |
| Stifel Financial Corp. | SF | $ 43.55 | 11 | $ 479.05 | 11.48106 | $ 500.00 | |
| CAPELLA EDUCATION CO | CPLA | $ 79.78 | 6 | $ 478.68 | 6.26723 | $ 500.00 | |
| MONRO MUFFLER/BRAKE | MNRO | $ 38.76 | 13 | $ 503.88 | 12.89990 | $ 500.00 | |
| LUMBER LIQUIDATORS | LL | $ 23.44 | 21 | $ 492.24 | 21.33106 | $ 500.00 | |
| NEOGEN CORP | NEOG | $ 26.60 | 19 | $ 505.40 | 18.79699 | $ 500.00 | |
| LINCOLN EDUCATIONAL SVCS | LINC | $ 20.69 | 24 | $ 496.56 | 24.16626 | $ 500.00 | |
| MARKETAXESS HOLDINGS INC | MKTX | $ 13.94 | 36 | $ 501.84 | 35.86801 | $ 500.00 | |
| TOTALS | $ 10,073.49 | $ 10,000.00 | |||||
First off, don’t get scared. FolioInvesting.com does ALL the math for you. You just enter the stocks you want to buy and the dollar amount you want to invest. It will do the rest of the math for you. No entering the number of fractional shares or different dollar amounts. You can just tell FolioInvesting to buy using even dollar amounts for each stock in your list and it takes care of the rest.
Being able to buy fractional shares may not sound all that important, but when you are spreading that $10,000 amongst 20 stocks, it makes a BIG difference in evening out your investment results. Also, there is the obvious savings in commissions as discussed in the previous post.
Think about it, fractional shares make sense and help. Look at the table again and you will see that you can easily get over-weighted in stocks with high share price due to the rounding required to buy a whole number of shares.
Good luck and happy investing. Sorry for the delay in writing this post. I hope that my next post will be sooner and I hope to get into some more meat of investing.
Bret