this video is sponsored by noaa an app i use to listen to articles from the world's leading financial publications stay tuned to the end of the video for a free trial and a special offer if you've ever considered investing in warren buffett's holding company berkshire hathaway you've probably noticed something peculiar about the firm's class a stock the ticker brk.a trades for over NUMBER_TOKEN NUMBER_TOKEN a share roughly half a million dollars for a single stock this ticker is actually the most expensive stock in the world and as you might imagine it makes it pretty inaccessible to the average joe now berkshire does actually have a class b share that trades for just a few hundred dollars so in this case there are other options available but this issue of expensive stocks is something you'll run into with a lot of popular positions companies like google and amazon trade for thousands of dollars a share making it difficult for beginners to buy these companies while staying properly diversified but a recent innovation fractional shares has come with a solution rather than buying a slice of the pie why not buy a slice of the slice genius right but how exactly do fractional shares work and is there a catch to this convenient capability we'll answer these questions and more on today's clean bagel well it's easy to get hung up on how much individual shares for a company cost in truth this dollar figure is pretty arbitrary whether a company decides to float NUMBER_TOKEN million shares for NUMBER_TOKEN a piece or NUMBER_TOKEN million shares or NUMBER_TOKEN NUMBER_TOKEN a piece the overall value of the company is the same but it's not to say the price doesn't matter if the stock price is too high it makes it harder for retail investors to own the company it also makes diversification pretty tricky when dealing with individual stocks if you only had ten thousand dollars to invest and we're looking to hold NUMBER_TOKEN different companies you might struggle to do so if you are hoping to include some of the popular picks we mentioned earlier fortunately there are a number of solutions to help investors tackle this sort of problem around expensive stocks mutual funds and etfs or exchange-traded funds allow investors to pool their money together in order to achieve economies of scale while stock splits are a corporate action that a company can take to knock down their stock price without hurting investor returns in NUMBER_TOKEN for example tesla carried out a NUMBER_TOKEN for NUMBER_TOKEN stock split dividing each of its units in NUMBER_TOKEN so that the unit price would be lower but in cases where investors want to pick stocks themselves and or the company doesn't choose to do a stock split brokerages have come up with another option to help investors buy expensive stocks and that is the fractional share the concept is pretty simple rather than buying a single unit of a company for say one thousand dollars you can instead purchase half of the stock or even a third or a fifth or a tenth of the position allowing you to gain exposure to your favorite companies with very little money up front and when i say very little money i mean it some of these brokers allow you to buy fractional shares for as little as a dollar making those high price positions a lot easier to get into the great thing about this solution is that even though you aren't investing the same dollar amount into the stock as you would need to otherwise with whole units you'll see the same relative return your fractional shares will experience the same percentage movements as the whole units
START_SPONSOR_TOKEN this video is sponsored by noaa an app i use to listen to articles from the world's leading financial publications stay tuned to the end of the video for a free trial and a special offer if END_SPONSOR_TOKEN