How fractional investing works

You’ve probably heard it all when it comes to building wealth and finding financial security. Heck, you might have even said some of it out loud. Things like, “This economy is nothing like the one my parents and grandparents grew up in” or “The market is stacked against people who don’t have millions or billions” or even “It’s too late and too hard for me to learn how to invest.”

But new times mean new strategies, tools and platforms that can help you build wealth. You just have to know where to look or have someone in your corner who can point you down the right path.

That’s where Desert Financial Digital Investing comes in. It’s a simple, smart way to start investing with purpose and a plan. You don’t need thousands or even hundreds to begin. You can start building your future with just $5. Because when life and money are in harmony, even small steps can lead to big possibilities.

What is fractional investing?

When you look at a stock price, you’ll typically see the price for one share, which is one unit of ownership in a company, like Disney, Amazon or Starbucks. Sometimes, the price for one share is high. But you don’t always have to buy a full share.

Fractional investing makes it possible to buy fractional shares, or pieces of a stock. That means both beginner investors and experts can get parts of a share starting at just $5. Then, that piece experiences the same movement as a whole share, helping you grow your wealth when the stock goes up.

What are the benefits of fractional investing?

Fractional investing makes it easier for everyone, not just the ultra-wealthy, to get in on the investing action and see the benefits of the market. You can do your own research, make your own choices and grow your long-term wealth, no matter how much you start with.

It also makes it easier to diversify your investments. If you have $200, you don’t have to spend all of it on one share of a single company. You can part it out and buy fractions of as many stocks as you want.

Diversification is important because it can protect your portfolio, or your personal collection of stocks. If you use that $200 to buy equal amounts of four companies and the stock price of one company dips, the other three could stay the same price, mitigating your losses.

Great! I have a dollar, but how do I start investing?

Unfortunately, you can’t just buy a stock while you’re checking out at the grocery store like it’s a pack of gum. You need a platform that gives you access to the stock market and lets you make trades — like Desert Financial Digital Investing, an all-inclusive investing platform that’s built into Online Banking and your Desert Financial mobile app and lets you buy full or fractional shares of your favorite stocks and more.

In addition to trading stocks, for $3.50 a month, you'll find tools you need to make smart investment decisions, like a stock simulator that lets you use test funds to see how hypothetical investments might perform and a robo-advisor that automatically invests for you based on your goals and risk tolerance. It’s all right at your fingertips for just $3.50 a month.

I think I’m ready, but how do I know what to buy?

They say, “Buy low, sell high,” but how do you know when a stock is low and when it’s high? Well, those are just some of the things you’ll learn by using Desert Financial Digital Investing’s learning tools. You’ll get a real understanding of market trends and how to read them, as well as how industry experts use them to their advantage.

You’ll also learn tried-and-true market strategies, like investing in exchange-traded funds, or ETFs. ETFs are designed to track market indexes, which you can think of as large baskets of specific stocks. For example, the S&P 500 is an index composed of 500 major companies on the stock exchange. When you buy a fraction or whole share of an ETF, your money is spread out among all the companies in the index, giving you another way to diversify.

Another strategy to look out for is dollar-cost averaging. That’s when you invest a fixed amount of money in the same stock, set of stocks or ETF at regular intervals, regardless of the price. Usually with dollar-cost averaging, you’ll want to pick something that historically rises, regardless of short periods of decline.

Though no investing strategy guarantees growth, dollar-cost averaging can help you mitigate risk, stay confident in your long-term plan and turn market adversity into big opportunities.

Let’s turn that curiosity into confidence!

Whether you're just getting started or looking for a new way to grow, Desert Financial Digital Investing makes it easy to take the next step. Explore, learn and build your confidence, all with tools that support your journey and give you the flexibility to invest at your own pace.

Let’s get those financial dreams out of bed and into action! Get started today, or check out our learning center that helps you reach your idea of financial well-being.