Remember all the GameStonk hype in January? Of course you do: Everybody was talking about it.
Thanks to the combined Powers That Be — Reddit and TikTok — the young masses have been flooded with investing info and inspiration. It seems as though everyone’s got something going in the stock market these days — and I, like so many others, have been feeling the FOMO.
But, here’s the thing: What companies can I realistically afford to buy shares in? Just look at Amazon. A single share is valued at a whopping $3,600 U.S. That’s wild.
I’d rather not invest in some obscure business based in Saskatchewan that I don’t know or understand just because I can afford it. But there’s no way in heck I’m throwing a huge chunk of my savings into one giant brand.
So what’s the fix?
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Fun with fractions
I have to admit, I’ve been decidedly intrigued by those Wealthsimple Trade ads that pop up on YouTube whenever I click on yet another Tasty cooking video. (Yeah, I know you’ve seen them, too!)
If you check out the Wealthsimple Trade page right now, you can’t miss its sparkly new feature: “Fractional Trading.” It’s accompanied by a cool graphic of an iridescent crystal that splits into shards.
To understand what that represents, let’s go all the way back to Grade 1 math: fractions.
With fractional trading, you don’t actually need to buy a whole share of the company. You can just buy a slice of that pie — er, share.
So, sure, you can’t afford that $3,600 Amazon share. Maybe you can afford $100. Pull out that calculator and plug in the numbers. That’s 1/36th of a share.
OK — What’s in it for you?
It might not sound like much, but every time that stock increases in value, you’re reaping the rewards at the same rate as the big shot investors with 20 Amazon shares. You’re just starting a little smaller with your stake — as little as one loonie, if you want.
This feature is a great way to get started investing, especially if you’re a beginner who doesn’t have hundreds or thousands of dollars to throw at a single share (*points at self*, this girl, right here) but you still want to invest in a company you know and love.
You also don’t have to worry about any of those sneaky commission fees that add up every time you buy or sell, either — Wealthsimple Trade is commission-free. So, it’s a win-win, really.
Which companies can you invest in?
Unfortunately, you can’t buy fractional shares of any company you like — not yet, anyway. But Wealthsimple does offer some pretty decent options, from both Canada and the U.S.
The four Canadian companies currently available are:
- Shopify (SHOP)
- Royal Bank of Canada (RY)
- Toronto Dominion Bank (TD)
- Canadian National Railway Co. (CNR)
And the 10 American companies are:
- Amazon (AMZN)
- Google (GOOGL)
- Apple (AAPL)
- Microsoft (MSFT)
- Facebook (FB)
- Netflix (NFLX)
- Tesla (TSLA)
- AirBnB (ABNB)
- Coinbase (COIN)
- Nvidia (NVDA)
How to get started
First things first: You’ve got to sign up for a Wealthsimple Trade account. You’ll need to enter some basic information to create your profile, then link a bank account so you can actually buy some stocks.
Next, search for “Fractional Trading” and select the stock you want. Choose how much money you’d like to invest, and Wealthsimple will tell you the estimated quantity of shares you’re buying.
Just don’t forget to do your research — and diversify your portfolios, people! Don’t go with just one company or even one sector. Spread things out a bit, so if one investment fails, you’ve others to back you up. (Can you imagine if you put all your money in Blockbuster?)
Looking at the list above, that could mean purchasing fractional shares in a big bank, a tech giant, a railway and a platform for trading some of those ever-elusive cryptocurrencies.
Now, if you’re not super comfy picking out your own stocks, consider opting for Wealthsimple Invest instead. A robo-adviser will build a portfolio for you and automatically rebalance it over time.
There’s even a fun feature called Roundup that lets you invest your “spare change” by rounding up your purchases to the nearest dollar. Every time you buy a Tall Pink Drink from Starbucks — listen, it’s summer, we’re all doing it — that extra 45 cents or so goes straight into your Invest portfolio.
It’s perfect if you know you should be investing more but never quite seem to get around to it…
