What is Microinvesting and how can I give myself the best head start?

Nick Sundich Nick Sundich, September 19, 2023

In this article, we take a look at Microinvesting – a form of investing that allows you to buy stocks that might be worth several hundred dollars a share with as little as $1.

 

What are the best stocks to buy right now?

Check out our top 4 stock picks

 

What is microinvesting?

It is a form of investing that allows you to purchase fractional shares of stocks with as little as $1. Instead of having to buy full shares, which can be expensive and require large amounts of money upfront, microinvesting lets you invest smaller amounts and build your portfolio over time.

Microinvesting is great for those who want to start investing but don’t have a lot of capital. It’s also an ideal option for those looking to diversify their portfolios but only have limited funds available. At its core, microinvesting works the same way as traditional investing, with the main difference being that it allows you to invest smaller amounts.

When you purchase fractional shares, they are pooled together with other investors’ money and invested in the same stocks that full shares would be. This means that you benefit from the same gains as those who have purchased full shares.

 

The pros and cons

The great thing about microinvesting is that it allows for diversification without a lot of upfront capital. With just a few dollars, you can invest into a variety of different stocks and build your portfolio over time. You’ll also have access to the same research tools and data that traditional investors use.

It can be an effective approach for those who want to learn the basics of stock market investing and gain experience with smaller investments first before transitioning into larger investments. But obviously, it also has some drawbacks that should be taken into consideration. One of the main drawbacks is that returns on investments are generally relatively small when compared to larger, more traditional investments.

This means that it could take a longer time to see significant returns from your microinvestments. Additionally, most platforms will charge fees for their services, which can eat away at any potential profits you may earn.

What are some of the best platforms?

There are several platforms including:

  • Raiz Invest
  • Spaceship Voyager
  • CommSec Pocket
  • Sharesies
  • Blossom
  • Pearler
  • Stake
  • Douugh

Raiz and Douugh might be familiar names. This is because both of these are ASX listed companies. Some companies work in unique ways such as automatically invest spare change from purchases or investing regular payments. They may offer the opportunity to buy shares direct or operate their own funds and allow their clients to invest money instead.

As we’ve noted before when discussing trading platforms, it is difficult to come out and say that one platform is the best for all investors. This is because all investors have their own unique goals, risk appetites and needs from trading platforms – so they should all do their homework about them.

Looking specifically at microinvesting, we suggest potential clients look for the fees charged by the platforms, how they operate and what markets they offer for investors.

 

Microinvesting is worth considering

No matter what your financial goals are, microinvesting is a great way to get started investing without putting large amounts of money upfront. With as little as $1, you can begin building a diversified portfolio and take control of your financial future.

If you’re interested in learning more about microinvesting, there are a variety of online resources available that can help you get started. From educational courses to online tools, there’s something out there for everyone who wants to begin their investing journey. So don’t wait any longer: start exploring!

 

Stocks Down Under Concierge is here to help you pick winning stocks!

The team at Stocks Down Under have been in the markets since the mid-90s and we have gone through many ups and downs. We have written about every sector!

Our Concierge BUY and SELL service picks the best stocks on ASX. We won’t just tell you what to buy – we give you a buy range, price target and stop loss level in order to maximise total returns. And we will only recommend very high conviction stocks where substantial due diligence has been conducted.

Our performance is well ahead of the ASX200 and All Ords.

You can try out Concierge for FREE.

 

GET A FREE TRIAL TO CONCIERGE TODAY

 

There’s no credit card needed – the trial expires automatically.

 

 

Blog Categories

Recent Posts

Toubani Resources

Toubani Resources (ASX:TRE) gets ready for the big time in Mali

Toubani Resources (ASX:TRE) is another aspiring gold producer. What’s not to love about an aspiring gold producer right now? Its…

Capricorn Metals

Capricorn Metals (ASX:CMM): Its sequel gold mine will be even better than the original

Capricorn Metals (ASX:CMM) is one of several gold miners on the ASX that has slid under the radar of many…

Price to Book

Here’s why the Price to Book (P/B) multiple is so important to know if you own shares in the Big 4 Banks

If you own shares ASX Bank stocks (especially the big Four), you need to know about the P/B multiple (Price…