This Brokerage Account Feature Has Totally Changed How I Invest

This brokerage account feature has revolutionized investing for me -- and many others. 

I've been investing my money for many years and I take many different things into account when I decide what assets to buy. For many years, one of the key considerations was how much the share price of a stock was. 

See, like most people, when I wanted to buy shares of stock, I needed to make sure that I could afford them. I didn't have an unlimited amount to invest, so some investments, such as buying shares with prices of $1,000 or more, seemed out of reach to me. If I had $2,500 to put into the market, for example, I would not even consider purchasing stocks that had a higher share price because I wouldn't have been able to afford them. 

In recent years, however, my brokerage firm began offering a new feature that revolutionized my investing process. Here's what it is. 

My entire investment style changed because of this new brokerage account offering

Not too long ago, the brokerage firm I invest my money with began offering fractional shares. With this new option available, I am no longer required to buy only full shares of stocks I am interested in. Instead, I can buy whatever fraction of a share I want, simply by specifying the dollar amount I hope to invest in a company.

If I have $500 to put into the market, for example, and the shares of a company I am interested in buying sell for $1,000, I'm not closed out of making the purchase. I can buy a fraction of a share -- 0.5 of one to be exact. With this small investment, I will still get the same percentage returns as everyone else who owns the same stock. 

The ability to buy fractional shares was a game changer for me because I always knew that companies with high share prices were sometimes a bargain while those with low share prices could be overpriced. For example, a stock that's worth $1 a share but that's priced at $2 per share may seem cheap because you don't need much to invest in it, but it's actually not -- whereas a stock priced at $3,0000 a share that's worth $4,000 is a great deal.  

While I was aware of this, I couldn't always act on my knowledge to buy the investments I wanted because of the rules requiring only full share purchases. Now, I am not constrained by a high share price and I can still invest in the company if I believe it has solid growth potential. 

Fractional shares can make it easier to invest in what you believe in

Once fractional shares became available as an option for investors, I knew that this could make it much easier for me to buy assets based on which ones I believe will perform best instead of based solely on whether I could afford their share price. I never want to give up this option, so I'll always make sure to invest only with brokers that offer fractional shares.  Anyone who wants the widest choice of investments and who doesn't want to be constrained by the size of their pocket book may want to consider doing the same.