What is a partial share?

A partial share, also known as a fractional share, gives investors the opportunity to buy a portion of a stock or ETF on a budget. In fact, you can start investing with as little as $1, making it easier to grow your portfolio at your own pace. For example, let’s say the stock you’re interested in currently goes for $300 per share but your budget is $100, with partial shares, you can buy ⅓ of it for $100. Crazy, right?!

Benefits of Partial Shares

Partial shares are beneficial to any investors, especially those just starting as it allows them to invest within their budgeted amount to build a diverse portfolio. Since partial shares allow you to invest with as little as $1, they can help you maximize every dollar in your account while still enjoying the benefits of ownership, such as proportional dividend payouts on the shares you own. So for those wanting to own shares in high-priced companies, partial shares are your solution to purchasing those shares.

Limitations & Risks of Fractional Shares

While there are many advantages to fractional shares, there are a number of limitations and risks to be aware of. One major limitation is that a fractional share cannot be traded in the open market. In addition, fractional shares provide smaller investment or dividend income since your ownership is a small fraction of a full share. Another consideration is voting rights, depending on the brokerage, fractional shareholders might not have voting rights, or, in some cases, a fractional shareholder could have a collective vote with other fractional holders. Finally, if you decide to switch brokerages, fractional shares are not transferable and would need to be liquidated, possibly resulting in capital gains taxes. As with any investment, fractional shares carry risk, and it’s important to carefully consider your options before investing.

TD Offers Partial Shares!

TD Direct Investing has made it more accessible to invest with their new partial shares feature. Partial share trades are available through TD Direct Investing and TD Easy TradeTM, starting at only $1.99. The feature is eligible on several account types, including TFSAs, RRSPs, and many more, to make diversifying your portfolio easier than ever. You can buy a fraction of a stock or ETF starting as low as $1 to make even high-priced stocks affordable on any budget. Whether you choose to invest by dollar amount or share quantity, TD supports up to five decimal places in trading.

You can learn more about TD’s partial shares here.

Learn the Basics of Investing with Fun and Zero Risk with Stock Shock

If you’re still unsure about how to invest and want to learn without risking real money, Stock Shock is the perfect starting point. Stock Shock is an investment strategy board game where players can explore the fundamentals of investing in a risk-free environment.

Within this game, you will be able to make investments in 8 different industries, experience market fluctuating events that will change share prices, and learn the ups and downs of investing.

Stock Shock will introduce you to concepts such as diversification and market volatility to better prepare you for your future investments in real life. If you’re ready to learn how to invest, purchase our tabletop game or try out the free online version today!