Investing in Amazon stock can be a great way to make money, but for those who don’t have a lot of money to invest, the question arises, can I buy 1 dollar of Amazon stock? The answer is yes, though there are certain caveats.
For starters, one cannot buy a single share of Amazon stock for $1. The current market price of a single share of Amazon stock is around $3,000. However, what an investor can do is buy fractional shares.
Fractional shares are pieces of a whole share that can be bought and sold in increments as low as one-tenth of a whole share. Through fractional investing services such as Stockpile or M1 Finance, investors can purchase tiny fractions of stocks and ETFs with dollar amounts as small as $5. This makes it possible for investors to purchase partial shares of Amazon stock for only $1 if they so choose.
The Benefits Of Buying Fractional Shares
Buying fractional shares has many advantages when compared to traditional investing methods. For starters, it eliminates the barrier to entry that many novice investors face when trying to invest in blue-chip stocks such as Amazon.
Investors don’t need thousands of dollars to get started; instead they can start investing with just a few dollars. Additionally, fractional shares allow investors to diversify their portfolios more easily by allowing them to purchase multiple stocks and ETFs with smaller amounts of money.
The Disadvantages Of Buying Fractional Shares
While the idea of buying fractional shares may seem appealing at first glance, there are also some drawbacks associated with this strategy. For starters, while buying fractional shares allows investors to invest smaller amounts of money than traditional methods would allow them to do so, these investments will still incur brokerage fees and other costs associated with trading stocks and ETFs. Additionally, fractional investing services may have limitations on the types of investments they offer or the amount you can invest in any given security.
In conclusion, one cannot directly buy one dollar’s worth of Amazon stock due to its high market price; however it is possible through fractional investing services like Stockpile or M1 Finance which allow investors to purchase partial shares for only $1 if they so choose. While this does provide some benefits such as allowing novice investors easier access into the markets and diversifying their portfolios more easily with smaller amounts of money, there are also some drawbacks such as brokerage fees and limitations on the types and amounts you can invest in any given security.