Alternatives Are There To Get Started For Fractional Investments

Noting that investing is not just for the rich, from the financial comparator HelpMyCash they shared a document with Cointelegraph in Spanish, in which they clarify that there are several options to invest. Alternatives include buying stocks and cryptocurrencies , or even contributions to mutual funds.

“For a long time, high commissions from brokers have been a deterrent for small investors, who needed to allocate large amounts to offset the costs of each transaction. Also, there weren’t that many options to invest in. Now, with the new apps (…), investing is much easier and, above all, cheaper ”, highlighted sources from the financial products comparator And not only that, but they stressed that you can start with very little money.

Fractional shares from a penny
How can you invest with little money if some of the most popular stocks on the market cost hundreds of euros? Actually, you don’t have to buy them whole. Although prices can be scary, the fintech industry allows you to buy bits of stocks, so you can start investing from just a penny.

“Of course, we must not forget that, even if we invest little money, we will assume the same risk as if we bought the entire share. And if, in addition, we do not diversify and bet on stocks with high volatility, the risk will be greater ”, they pointed out.

Fractional stocks are a way to start investing without a lot of money. This service allows you to allocate, for example, 100 euros to a share worth 1,000. In return, a fraction of said title is obtained proportional to the capital that we have contributed. This operation not only allows you to start investing with little money, but also to diversify, since the money can be distributed among several values.

“T he fractional investment in stocks and also in ETFs offered by new online brokers such as Vivid Money or Bitpanda is actually based on derivatives that reproduce the price of the share or exchange-traded fund and that have the same value (its price goes up and down like the stock or the ETF ) ”, they specified from HelpMyCash.

For example, the German neobank Vivid Money, which allows you to invest in fractional shares from just one cent, explains on its website: “When you buy a fractional share with your Vivid account, you do not end up being the owner of the underlying share, since technically you do not it is possible to be a co-owner of a share ”.

From HelpMyCash, they indicated: “Fractional shares can give the right to receive dividends, just like full shares (in this case the dividend will be proportional to the fraction of the share that has been purchased).”

“We can only trade fractional shares through brokers that offer this service,” they added. And they cited examples of firms that allow you to buy fractional shares, such as Interactive Brokers, eToro, Vivid Money or Bitpanda.

Buy portions of cryptocurrencies
Not only can you buy fractions of stocks and ETFs, but also bits of cryptocurrency.

The current price of a bitcoin to tens of thousands of dollars, can be scary, but that amount is not necessarily needed to enter the market.

The fact that fractions of bitcoin or other cryptocurrencies can be bought through an exchange, or P2P, opens the doors to thousands of investors eager to take a piece of the pie.

In any case, if you decide to bet on cryptocurrencies, you have to be well informed and be aware of possible volatility.

Invest in mutual funds with little money
Investment funds are also available to many: “Bankinter, for example, allows you to start investing from just 10 euros and there is no minimum amount at ING. MyInvestor, for its part, offers Vanguard, iShares, Amundi and Fidelity index funds with no minimum and no custody fee ”.

Invest little money with the help of an advisor
According to HelpMyCash, those who want to build their own portfolio of funds, but do not know which ones to select, could find an ally in the “robo advisors”.

“The client responds to a test and then the robo advisor offers him a diversified portfolio of funds adapted to his objectives and his risk profile, so that the user does not need to search among the hundreds of funds available, but rather these managers advise him and they invest for it ”, they clarified from HelpMyCash.

The robbery advisors’ portfolios can be made up mainly of passively managed funds, which are much cheaper than actively managed funds.

“MyInvestor allows you to invest in your portfolios from 150 euros. Openbank’s theft advisor is available from 500 euros and Bankinter’s, known as Popcoin, from 1,000 euros. As for the independent managers, Finizens and InbestMe allow investment from a thousand euros and Indexa Capital and Finanbest set the minimum at 3,000 ”, they detailed.

Are we ready to invest?
Encouraged by the prospect of earning money, many savers have turned investing into their new hobby.

“The fever to invest has caused unusual situations such as the fact that you have to queue to open an account with an online broker. During the first half of 2020, DeGiro broker gained 217,548 new clients, an increase of 265% year-on-year. The volume of new clients was such that the Dutch broker had to open a waiting list to attend to the requests of new clients. The eToro broker , for its part, captured some five million new users in 2020, ”they highlighted in the document shared with Cointelegraph in Spanish.

The question is whether all newcomers are sufficiently informed and are they aware of the risks they are running.

The fear of being left out, the almost constant news about the rise of certain assets and the power of social networks and Internet forums have led many savers to want to join the party. And now it’s easy, cheap, and it doesn’t take a lot of money to get started. The problem is that if it is not done judiciously, but rather as a gamble, it can end up being expensive.

The call effect that social networks and Internet forums have can generate great volatility in some assets. But these roller coasters only benefit a few, usually the first to arrive, while the last to enter lose out.

Although it is now easier to invest, the risks are still there. The experts of the financial product comparator HelpMyCash warn that, whatever the amount we are going to allocate, we must not forget two basic rules: “First, we must not invest in anything that we do not understand and, second, we must only allocate the money from that we can do without ”.

To conclude, they stressed that you should never invest all of the savings or the money that we will need in the short term. And, in addition, we must be aware that we can end up losing money.

The Great Writer and The Passionate Poet As Well, He Graduated from University Of Florida in Journalism and Brad have around 12 years of experience in news and media section.

Sam Brad

Sam Brad

The Great Writer and The Passionate Poet As Well, He Graduated from University Of Florida in Journalism and Brad have around 12 years of experience in news and media section.

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