Photo Credit: Anygator.com
You may have heard about this latest financial innovation coming out from Wall Street. Can’t afford that Berkshire Hathaway stock? Just buy a fractional share instead! Boom. The easy button strikes again.
I’m not a fan of fractional shares. I have to endure some painful mental gymnastics in figuring out just how much stock I own. Yes, mutual funds have had fractional shares (in easily accessible decimal forms) for decades. But, mutual funds cannot trade intra-day. Nor can they be traded in consecutive days. Etc. ETF’s are the way.
I prefer to buy stocks in lots, i.e., in tens, hundreds, or thousands. For example, if I wanted to buy some VTI, I would buy them in chunks of ten shares. I see nice, clean numbers on my spreadsheets and can do some mental exercises in my head should I need to act quickly.
But, I don’t have the money!
That’s true. I don’t either. 🙂 This is why I have margin. Only have $1,700 left to buy 7 shares of VTI? Borrow $600 from my margin account to round the purchase up to 10 shares of VTI. Simple. My regular contributions should eventually catch up and pay off this short-term margin loan.
Disclaimer
This post is for entertainment purposes only. No warranty, express or implied, is offered in this posting. No client relationship is created between the author and reader. Federal and state laws vary widely when it comes to personal finance. I am not offering investment advice. You are encouraged to read more information on personal finance by different authors to gain the education you may need to manage your finances.
