Investing in the stock market can seem daunting at first, but with the rise of fractional share purchases, it has become more accessible to many small investors. What is a fractional share? It’s a fraction of a full share of a stock or ETF that allows investors to buy just a tiny portion of the stock, rather than having to purchase a whole share which can be costly.
In this article, we will take a look at how to buy fractional shares on M1 Finance. M1 Finance is a free investing platform that allows investors to buy fractional shares of stocks and ETFs.
Step 1: Join M1 Finance
The first step to investing in fractional shares using M1 Finance is to join the platform. Head to the M1 Finance website and sign up for an account by providing your personal details and creating a password.
Step 2: Build Your Portfolio
After creating an account, the next step is to build your portfolio. You’ll have the chance to select individual stocks or ETFs, or you can choose from one of the pre-selected portfolios called Pies. Pies are diverse groups of stocks and ETFs that provide instant diversification and can be customized to fit your investment goals.
Step 3: Add Funds to Your Account
Once you’ve built your portfolio, you’ll need to add funds to your M1 Finance account. The platform offers two deposit options: standard and instant deposits. Standard deposits are free and can take up to five business days to process. Instant deposits require a 1.5% fee and are processed immediately.
Step 4: Place Your Order
After funding your account, it’s time to purchase fractional shares. Go to your portfolio, enter the amount you want to invest, and the platform will automatically divide up the sum among the stocks or ETFs in your portfolio.
Step 5: Review Your Order
Before finalizing your purchase, review your order to make sure everything is correct. Take a look at your investment amount, and double-check that you’ve selected the right stocks or ETFs.
Step 6: Confirm Your Order
Once you’ve triple-checked your order, click the “confirm” button to finalize your purchase. Your fractional shares will be purchased immediately and will appear in your portfolio.
Step 7: Monitor Your Investments
Now that you’ve made your purchase, make sure to monitor your investments regularly. M1 Finance offers an easy-to-use dashboard that shows you how your investments are performing.
Step 8: Adjust Your Portfolio
Depending on your investment goals, you may need to adjust your portfolio from time to time. M1 Finance allows investors to easily adjust their portfolio holdings and change the percentage of each stock or ETF held in their portfolio.
Frequently Asked Questions
1. What are fractional shares?
Fractional shares are a fraction of a whole share of a stock or ETF that allows investors to invest in a small portion of the stock, rather than having to purchase a whole share.
2. What is M1 Finance?
M1 Finance is an online investing platform that offers free investment services, including the option to invest in fractional shares.
3. How do I join M1 Finance?
To join M1 Finance, visit the platform’s website and sign up for an account by providing your personal details and creating a password.
4. How do I buy fractional shares on M1 Finance?
To buy fractional shares on M1 Finance, you need to build your portfolio, add funds to your account, place your order, review your order, and confirm your order.
5. How long does it take to process standard deposits on M1 Finance?
Standard deposits on M1 Finance can take up to five business days to process.
6. Does M1 Finance charge fees for instant deposits?
Yes, M1 Finance charges a 1.5% fee for instant deposits.
7. How often should I adjust my portfolio on M1 Finance?
The frequency of portfolio adjustments depends on your investment goals. You may need to adjust your portfolio from time to time to optimize your investment strategy.
8. What does the M1 Finance dashboard show?
The M1 Finance dashboard provides investors with information on how their investments are performing, including gains and losses.
9. Can I change the percentage of each stock or ETF held in my portfolio on M1 Finance?
Yes, M1 Finance allows investors to easily adjust their portfolio holdings and change the percentage of each stock or ETF held in their portfolio.
10. Is M1 Finance a safe platform to invest with?
Yes, M1 Finance takes security seriously and uses bank-level security measures, such as two-factor authentication and data encryption, to protect investors’ information and investments.
Conclusion
Investing in fractional shares has become more accessible to small investors with the emergence of platforms like M1 Finance. With this step-by-step guide to buying fractional shares on the platform, investors can make informed investment decisions and begin building their portfolios. Remember to monitor your investments regularly and adjust your holdings if necessary to achieve your investment goals.
