Fidelity Investments: Fractional Shares And Your Portfolio

Fidelity Investments offers fractional shares for over 7,000 U.S. stocks and ETFs, making it easier for investors to diversify their portfolios with lower investments. Investors can buy fractional shares starting at as little as $1, and there are no account fees or minimums for opening a retail brokerage account. Fractional shares allow for dollar-cost averaging, providing smaller investors with the ability to gradually build a diversified portfolio without needing large sums of money upfront.

Fractional shares, also known as dollar-based investing, allow investors to buy a fraction of a share

Fidelity offers fractional shares for over 7,000 U.S. stocks and ETFs, making it easier for investors to diversify their portfolios with lower investments. Investors can start investing with as little as $1, and there are no account fees or minimums for opening a retail brokerage account. This makes Fidelity a good choice for those who want to invest in stocks that cost hundreds of dollars per share but don't want to put up that much cash.

To buy fractional shares on Fidelity, investors need to open a Fidelity account, log in, fund their account, click the "Trade" tab, change the setting from "Shares" to "Dollars", and submit their order. Fractional share orders are entered as market or limit orders and are only good for the day.

Fractional shares provide a lower entry point for investors, allowing them to gain market entry sooner. They also enable smaller investors to employ dollar-cost averaging and build a diversified portfolio over time without needing large sums of money upfront. However, fractional shares may complicate tax reporting as each sale can trigger taxable events based on share allocations. Additionally, fractional shares may be harder to sell if the stock doesn't trade much, and they cannot be transferred—they need to be sold prior to any account transfer.

Fidelity offers Stocks by the Slice, allowing investors to invest as little as $1 in over 7,000 US stocks and ETFs

Fidelity offers Stocks by the Slice, allowing investors to buy fractional shares of over 7,000 US stocks and ETFs. This means that investors can buy a fraction of a whole share of a stock, investing based on a dollar amount rather than an individual stock's price or a certain number of shares. This allows investors to get started with as little as $1.

Fractional shares, also known as dollar-based investing, are a good choice when you want to invest in stocks that cost hundreds of dollars per share but don't want to put up that much cash. With fractional shares, you can decide how much you want to invest, regardless of the share price. For example, if a stock is trading for $130, you could invest $20 and buy one-sixth of a share.

Fidelity offers a user-friendly platform, providing educational resources and research tools to help investors make informed decisions. The process for buying fractional shares is simple and involves opening an account, funding it, and placing trades based on dollar amounts.

There are several benefits to investing with fractional shares on Fidelity. Firstly, it offers a wide selection of stocks and ETFs for fractional share investing, with over 7,000 shares available. Secondly, there are no account fees or minimums to open a retail brokerage account, and investors can buy fractional shares for as low as $1. Thirdly, fractional shares allow for dollar-cost averaging, providing smaller investors with the ability to gradually build a diversified portfolio without needing large sums of money upfront. Finally, Fidelity has a low-fee structure, offering $0 commissions for online US stock and ETF trades.

However, it's important to note that investing in fractional shares still involves risk. Fractional shares may also complicate tax reporting, as each sale can trigger taxable events based on share allocations. Additionally, fractional shares for certain securities may not be liquid, and there may be limitations on transferring or receiving certificates for fractional share positions outside of Fidelity.

There are no account fees or minimums for opening a retail brokerage account with Fidelity

Fidelity is a great option for investors who want to start investing with a small amount of money. There are no account fees or minimums for opening a retail brokerage account with Fidelity. This means that investors can open an account without any money and start investing with as little as $1. This makes it easier for investors to diversify their portfolios with lower investments.

Fidelity's fractional shares offering is a smart way to start investing. Fractional shares, also known as dollar-based investing, allow investors to buy a fraction of US stocks and ETFs. This means that investors can own a slice of their favourite companies without having to pay the full share price. For example, if a stock is trading at $130 per share, an investor could purchase 0.153 of a share for $20. This makes investing more accessible and affordable for those who are just starting or have a limited amount of money to invest.

Fidelity offers a user-friendly platform with educational resources and research tools to help investors make informed decisions. The process of buying fractional shares on Fidelity is simple and straightforward. Investors can open an online account, log in, fund their account, click on the "Trade" tab, change the setting from "Shares" to "Dollars", and submit their order.

Fidelity is one of the leading platforms for fractional investing, offering over 7,000 individual US stocks and ETFs to choose from. With $0 commissions for online US stock and ETF trades, no account fees, and a low minimum investment requirement, Fidelity is a strong choice for beginners looking to diversify their investments.

Investors can buy fractional shares of stocks and ETFs listed on the NYSE or Nasdaq

For example, if you want to invest in Tesla stock, which is trading at $200 per share, and you only have $20, you can buy one-tenth of a share. This is also known as dollar-based investing, and it lets you determine how much to spend on each investment.

Fidelity offers Stocks by the Slice, which allows investors to buy fractional shares of over 7,000 US stocks and ETFs with as little as $1. There are no account fees or minimums for opening a retail brokerage account.

Here's how to buy fractional shares on Fidelity:

• Open a Fidelity account: You'll need to provide your basic personal information, such as your Social Security number, name and address, and select the type of account you want to open.
• Log into your Fidelity account and fund it.
• Click the "Trade" tab on the top left of your dashboard, and select the type of trade you want to make.
• Change the setting from "Shares" to "Dollars" to enable fractional share purchases.
• Submit your order by entering the dollar amount you want to invest, and then click "Preview order" to review and confirm your order.

Fractional share orders are executed in real-time during market hours (9:30 a.m. to 4:00 p.m. ET on normal trading days) and are only good for the day of the trade.

Fractional shares can be bought and sold on the Fidelity Mobile® app or the desktop version of the platform

Step 1: Open a Fidelity Account

To buy fractional shares or any other type of investment from Fidelity, you must first open an account. To open a Fidelity account independently, you must be at least 18 years old. You will also need to provide the following information:

• Social Security number
• Name and address of your employer
• Bank account information

Step 2: Log Into Your Fidelity Account

Once you have opened an account with Fidelity, you will need to log in and fund your account. Remember, fractional share trading takes place in real-time, so the funds will need to be settled and available in your account before you can place a trade.

Step 3: Click the “Trade” Tab

The “trade” tab is at the top left of your Fidelity dashboard. Once you click on “trade,” a dropdown menu will open with a form to fill out regarding what type of trade you’d like to make.

Step 4: Change the Setting From “Shares” to “Dollars”

By selecting the “Dollars” setting, you will be able to buy fractional shares. This will base your order on a specific dollar amount, instead of buying a specific number of shares. Dollar amounts can be entered out to two decimal places, for example, $50.75. The order is then converted into shares out to three decimal places and rounded down to the nearest decimal.

Step 5: Place Your First Order

Once you've decided on the fractional shares you want to buy, it's time to place your first order. Whether you're using the app or the website, you'll need to search for the stock or ETF. Once you've found it, click "buy."

There are two ways to buy fractional shares:

• Change the setting in the app from "shares" to "dollars," so that your order is based on how much you want to spend vs. a specified number of shares.
• Keep the setting on shares and simply enter that you want the specified fraction, i.e., 0.1 for a stock trading at $100 per share if you want to invest $10.

You'll then decide on what order type you want: market order vs. limit order. With a market order, you're telling Fidelity to execute the trade right away. But with a limit order, you're saying that you only want to place the trade if the shares are trading at a price threshold you specify. If you choose a limit order, you'll need to set a maximum share price at which you're willing to buy.

All fractional trades through Fidelity are executed the same day during real-time market hours. Stock market hours are 9:30 a.m. to 4 p.m. Eastern Time weekdays, excluding holidays.

Selling Fractional Shares on Fidelity

The process for selling fractional shares on Fidelity is similar to the buying process. You'll need to click on the ticker symbol of the stock you own using the Fidelity app and then hit "sell" instead of "buy." You'll decide whether you want your sell order to be based on a set dollar amount or share amount, then you'll choose the type of order.

Frequently asked questions