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Here’s the good news if you own Amazon stock: the company is trading at over $3,500 a share.
Here’s the bad news if you want to own Amazon stock: the company is trading at over $3,500 a share.
Therein lies the catch-22 when it comes to investing in some of the the biggest and most successful companies: a lot of people who’d like to invest in extremely popular stocks like Amazon (AMZN), Shopify (SHOP), and Google (GOOGL) have been forced to sit it out because they are so, well… successful and popular.
We’re delighted to announce a solution: fractional shares. Today Wealthsimple Trade becomes the only trading platform in Canada to offer the ability to buy and sell portions of shares of US and Canadian companies, in increments as small as a single dollar. We’re starting with fourteen stocks — four Canadian companies, including:
Royal Bank of Canada (RY)
Toronto Dominion Bank (TD)
Canadian National Railway Co. (CNR)
And ten American ones:
Why are we doing this? Well first of all, because you all have been asking us to. (We like to think one of the things we’re best at is listening to our clients and doing our best to give them what they want.) Second, because we think fractional shares can help you diversify your investment portfolio. (You know about the importance of diversification, right?). If you don’t have an enormous amount to invest, you don’t want a disproportionate amount locked up in a single stock. And last, and most importantly, because it fits with our mission to democratize the levers of wealth creation. Why should shares of certain companies be available only to those who can afford to pay a high price? You’ve heard us say it before, but we’ll repeat ourselves: our founding principle is that powerful financial tools should be available to everyone, no matter where you come from or how much you have.
Here’s how it works:
Open the latest version of the Wealthsimple Trade app (or download it and set up an account if you don’t have one) and search for “Fractional Trading.”
When you are ready to buy, select the stock you want to purchase a fractional share of (see full list above).
Enter the dollar amount you want to invest ($200, $100, $1, etc.) and we’ll tell you the estimated quantity of shares you’ll get.
Similarly, when you sell a fractional share, you just enter the quantity of shares you want to sell (13.5, 0.7, 0.1, etc.) and we’ll tell you the estimated total value.
And a friendly reminder, orders for fractional shares are currently traded once a day. You will receive the execution price at the time the order is sent to the market.
Does this mean we think it’s a great idea to sell off your well-diversified portfolios (like our SRI growth portfolios that have gained 9.6% a year over the past five years) and start buying only fractional shares? Of course not. Our core financial philosophy hasn’t changed, and it’s not going to: the smartest way to grow your money long-term is by keeping fees low, keeping your investments diversified, and contributing regularly (ideally automatically, via direct deposit), and stay the course through the natural ups and downs of the market. Once you’ve done that? We think it’s a-OK to take your extra money and buy stock in companies you believe in. And now you can do it, even if you don’t have the extra $3,500 for a single share of Amazon.
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