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If you want to know just how much more opportunity there is for retail investors nowadays, then you only need to look back to a mere few years ago. Before the advent of discount brokerages and "app-based mobile investing," platforms changed the investing game forever...
Just think of the ease and comfort of giving your smartphone screen a few taps, firing up your Robinhood app, and buying stocks in under a minute.
Now, you still have to know which stocks to buy in order to make money, but not having to deal with all the "barriers" that regular investors had to struggle through just a few years back allows you to focus on the actual investing part - and better yet, the making money part.
By "barriers," I mean hefty commissions and fees, such as "transfer" fees and even odd-lot fees for buying less than a "block" of shares of stock, serving to discourage middle- and lower-income Americans from setting foot in the markets and making any money.
That was then, of course. Now everything has changed - much for the better. The rise of discount brokerages like Charles Schwab and app-based mobile investing platforms like Robinhood have disrupted those old, high barriers.
If you're just starting out, right now is the perfect time to take that all-important first step into the markets, to start building lasting wealth. Because let's face it - there's really no reason NOT to start investing today, regardless of whether you've got $1,000, $100, or less.
And if you've been investing for years, you'll love these three stocks I've got my eye on now...
On Monday, I told you about four stocks that'll help you get started on your wealth-building path, that you can buy in fractional shares - so you don't need to shell out for an entire share if you don't want to. And today, I’m adding three more stocks to complete your wealth-building “buy” list…
Fractional Shares Have Turned Investing on Its Head
Forty years ago, as I got my start in "The Pit" at the Chicago Board Options Exchange (CBOE), the trading scene was very, very different. Wall Street was the mecca of the world's financial elite.
The cost of entry for retail investors outright stole their ability to control their own financial futures. But now those obstacles are gone.
Back in 1975, Charles Schwab became the first broker to slash its rates, creating what we know today as the "discount broker."
Now almost all of the big-name brokers (Fidelity, TD AmeriTrade, TradeStation, and more) offer trades with commissions that are deeply discounted or nonexistent. And you can do those transactions online - without the help of human brokers of the past.
The first online brokerage popped up in 1992. And the innovators never looked back; now there are apps like WeBull and the aforementioned Robinhood - freely accessible to anyone with a smartphone. But it gets even better...
In 2017, M1 Finance made waves with the introduction of fractional shares. Now, if you missed my previous article, I'll give you a brief overview.
Fractional shares are exactly what they sound like: buying fractions of shares of stocks. You may have heard it referred to as "micro-investing."
Buying a one-share position of Tesla Inc. (NASDAQ: TSLA) stock will set you back $680, while Amazon.com Inc. (NASDAQ: AMZN) will cost you an even heftier $3,400 - the list goes on. Naturally, an investor with a relatively limited amount of capital might feel like those stocks aren't for them, or that they have to look elsewhere or settle.
That's where the magic of fractional shares comes in. Instead of being forced to pay up the full stock price, you can grab part - or a "slice" - of a share using that "pay what you can afford" strategy.
That's the really revolutionary development. Sure, it's great to have access to your portfolio on a handheld device that fits in your back pocket, but the ability to buy a fraction, however large or small, of the market's best companies? That's the game-changer.
With just a couple of bucks, you can get started. Do you have a spare $10? Managed to save $50 on groceries this week? Did you get a nice payday from stock you sold and now have $500 to reinvest? However much you have on hand, you can grab a slice of a thousand-dollar stock - reaping the same benefits as the person who paid the full amount.
But no matter how much you have to start, get into the market, because you have to be in it to win it. When - not if - you start to reap profits with your nest egg, however modest, you can build on that success and add to your positions whenever and however you see fit.
As I mentioned last time, the beauty of my Fractional-Shares Starter Portfolio is that you can grab those stocks sitting pretty at the very top. Anyone can own the best companies in the market, run by the smartest people, with the biggest growth potential.
So here are the three additional fractional share stocks you can buy today, as in, before the market closes at 4:30 p.m. (And in case you missed the last four I shared, catch them right here.)
Aim High with My Complete Fractional-Shares Starter Portfolio
Fractional-Shares Starter Stock No. 5: Target Corp. (NYSE: TGT) - As stocks go, Target is a fantastic base-builder and also happens to be my favorite "Big Box" retailer in the economy right now. Its recent trading price of about $241.85 makes it a "fractional shares" candidate.
Fractional-Shares Starter Stock No. 6: JPMorgan Chase & Co. (NYSE: JPM) - Thanks to my career in finance, I'm a fan of banks - or, at least, the "right" banks. And JPMorgan fits the bill, especially at its recent price of $151.12 a share. It's also a dividend-payer - with a current yield of nearly 2.4%. If you buy a fractional share of JPM, you'll get an equal ratio of the $3.60 a year dividend payout - maintaining that yield on your stake.
Fractional-Shares Starter Stock No. 7: SPDR S&P 500 ETF Trust (NYSEArca: SPY) - A bit more conservative, but you still want to build wealth through stocks? Consider some exchange-traded funds (ETFs), which you can also invest in fractionally. One we like a lot is the ETF proxy for the Standard & Poor's 500 Index.
And remember, with fractional shares, your future is wide open. But there are some practical limitations - the "fine print" - to consider carefully.
Not every brokerage offers fractional shares, and if they do offer them, the stocks you can buy in slices can be limited.
For example, Fidelity will let you buy a fractional share of any stock or exchange-traded fund (ETF) listed in the National Market Index - think the New York Stock Exchange (NYSE) and NASDAQ, for instance.
Then you have Schwab, which limits fractional shares to stocks listed in the S&P 500. And then there's SoFi Active Investment, which is so limiting, you can only pick from 43 stocks or ETFs that they've pre-selected.
But don't let those obstacles limit you; there's plenty of upside. Like any revolution, the "Fractional-Shares Revolution" is a tectonic event in the history of the markets. It's a new day - go build wealth.
Here's another idea to get you started - decidedly smaller than the stocks I just mentioned, but with what could be even greater profit potential.
Right now, I'm recommending five technology stocks that are entering hyperdrive - I believe these stocks will cause a $353 billion ripple in the next 18 months.
It's going to be so big that it will forever alter American life. For three reasons why each of these stocks is a total BUY, click here for all the details.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.