Fractional Investing: A game-changer for retail investors

• Fractional investing has revolutionized the investment landscape, making it accessible to retail investors with limited funds.
• Technology has made it possible via investment apps for retail investors to buy shares of companies listed on the stock market even if they have a small budget.
• Retail investors can now own a portion of companies on both Nigerian and US stock markets like MTN, Nestle, Zenith Bank, Amazon, Google, etc even with limited capital.

Investing in the stock market has traditionally been associated with buying full shares of stocks, mostly done by institutional investors (which tend to be a barrier for small investors with limited funds).

Corporate Finance Institute defines Institutional investors as organizations such as banks, venture capital funds, insurance companies, and pension funds that invest on behalf of their members.

These types of Investors tend to exert a significant influence on the market, both positively and negatively.

However, the rise of fractional investing has revolutionized the investment landscape, making it accessible and empowering for individuals with any budget.

This innovative approach allows individuals to participate in the stock market with any budget, opening up a world of opportunities previously inaccessible.

In this article, we will explore how fractional investing is transforming the game for small investors and opening doors to new opportunities.

• Level playing field

Fractional investing allows individuals to purchase a fraction of a share, enabling them to invest in high-priced stocks that would have been out of reach otherwise.

Technology has made it possible via investment apps for retail investors to buy shares of companies listed on the stock market even if they have a small budget.

This approach breaks down the barriers that previously limited small investors from accessing and benefiting from the growth potential of popular stocks.

Now, retail investors can own a portion of companies on both Nigerian and US stock markets like MTN, Nestle, Zenith Bank, Amazon, Google, etc. even with limited capital.

• Low barrier to entry

One of the key advantages of fractional investing is its low barrier to entry which makes it affordable.

By reducing the minimum investment requirement, fractional shares make it possible for small investors to enter the market and build a diversified portfolio with a wide range of stocks.

This accessibility empowers retail investors to embark on their investment journey, regardless of their financial situation, and fosters a culture of financial inclusion.

Also, with investment apps, retail investors can buy and sell any stock of their choice easier and faster with just a tap of a button.

You don’t need to meet a broker to do that for you, and that’s the beauty of fractional investing.

• Ease and Flexibility

Fractional investing allows retail investors like you and me to be flexible with the amount you want to invest with.

This helps you with greater control over portfolio diversification and the ability to align your budget with your personal finance goals.

With this ease, you can budget a certain amount of money per time and buy your favourite stock of choice consistently. This leads to the next point.

• Long Term Growth

While fractional investing is an accessible option for small investors, it also has the potential for significant long-term growth.

With Dollar Cost Averaging, you get to invest in the growth of those companies over time.

As the value of the shares appreciates, so does the value of the fractional investment, allowing you to accumulate wealth gradually.

Conclusion

Fractional investing has transformed the investment landscape, empowering small investors with the ability to participate in the stock market, diversify their portfolios, and potentially accumulate wealth.

Fractional investing allows individuals to start small and gradually build their investment journey.

With affordability, accessibility, long-term growth, and dollar cost averaging, fractional investing is a game-changer for small investors, paving the way for more financial inclusion.

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