Online investing has become one of the recent trends to which a lot of people are getting attracted. The traditional way of investing in stocks, real estate, and other investment schemes can also be done online thus helping you save time and money that can be used for other purposes. One of the types of investing that has been gaining a lot of popularity is the dollar based investing.
You will hardly find stocks round in number. In other words, not often you might have heard that $30 stock is available. However, you can stocks in the following manner i.e. not in whole number $13.45, $32.12 and $134.43. The cost of the shares is always the number of shares multiplied by its price. For example, if the price per share is $18.24 then you buy 20 shares for 20 x 18.24 = $364.8.
In dollar-based investing, the investor purchases the stock or different investments in a dollar amount you decide rather than purchasing in the multiples of stock price. If you think of investing $125 in a month, the amount of money you put does not usually purchase accurate whole number of shares. What you are doing is that you are purchasing $125 worth of shares. For instance, for a stock that is price of $18.25, your $125 will get you shares of a stock priced $6.85. What you can do is buy shares in fractions such as one quarter of a share.
Dollar-based investing can be a very good decision for an average investor who desires to spend consistent amount of money on long-term basis in the stock market. Most people do not have huge amount of money to invest at one go. However, the dollar-based investment allows one to invest spend in the stock market in small fractions.
The main reason is that very few people are able to save enough money that can be spent on buying stocks. By investing small amount at a time, one can easily save and invest simultaneously. It is also a wonderful way to learn about investing in the stock market.
Like other investment schemes, even this one has a drawback of the risk associated with it. Hence, you need to know the market trend properly and choose stocks wisely. Another way of earning handsome income regularly through your home or office computer is two tire affiliate marketing. You do not have to worry about the risk factor in this business but hold on to your horses well because you will have tough time managing the amount of money you have earned through it.
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