In stock investment, in addition to choosing stocks themselves, investors often face a core question: "How many shares should I buy?" This question seems simple, but the factors involved are very complex. The number of stocks purchased is not only related to the risk and return of asset allocation, but also directly affects the volatility and long-term performance of the investment portfolio. This article aims to analyze multiple influencing factors to help investors make scientific decisions and reasonably allocate the number of stocks.
Calculate the number of shares available for purchase based on the price
First, let's discuss how to determine the number of shares that can be purchased based on the stock price. In the current financial market environment, many online brokers have eliminated stock trading commissions, which makes calculations easier for investors.
The steps to determine the number of shares available for purchase are as follows:
Get accurate stock prices: Investors can use professional financial trading software or authoritative financial websites to check the real-time stock prices of target stocks. Be sure to ensure that the quotes obtained are instant, because the quotes provided by some public platforms may be delayed, which will mislead the calculation results.
Calculate the funds and stock price: Divide the total amount of funds you are prepared to invest in the stock by its current stock price. For example, if you have 5,000 yuan to invest in a certain stock, and the current trading price of the stock is 50 yuan, a simple calculation will give you 100 shares. However, in reality, the calculation result is often not an integer.
Determine the final purchase quantity: If your chosen broker supports fractional trading, the result calculated in the second step is the number of shares you can purchase; if it does not support fractional trading, you need to round the result down to the nearest integer.
Case
Take Tencent (00700.HK) stock as an example. Assume that you have HK$30,000 available for investment. After checking the real-time stock quote, you find that the current price of Tencent stock is HK$350 per share. By calculating 30,000÷350≈85.71 shares. If your broker supports fractional trading, you can buy 85.71 shares of Tencent stock; if it does not support fractional trading, you can only buy 85 shares.
The Importance of Portfolio Diversification
For investors, especially those who are new to the stock market, the significance of portfolio diversification must not be ignored.
they can choose to include at least 8 to 12 different stocks in their investment portfolio to achieve a more ideal diversified shareholding effect.
Nowadays, with the development of the market, most brokers have not only waived online stock trading commissions, but also supported fractional share trading, which enables investors to more conveniently diversify their limited funds into multiple stock positions, thereby effectively reducing the impact of single stock price fluctuations on the overall investment portfolio and improving investment stability and risk resistance.
Feasibility analysis of single share purchase
Buying individual shares of stock is feasible in today's market conditions. Thanks to the widespread availability of commission-free stock trading, buying individual shares of stock is now within reach, even if you have only a small amount of money in your brokerage account.
However, it should be noted that if the broker you choose is still charging trading commissions, then small single-stock investments may become impractical. This is because the commission costs may significantly erode your investment returns. In this case, investors should carefully consider switching to a broker that provides commission-free trading services. After all, there are many high-quality and commission-free options in the market, and it is obviously not a wise move to continue paying commissions to trade.
A discussion on the advantages of fractional share investing
In recent years, more and more brokers have begun to support fractional investing.
On the one hand, fractional investment opens the door for investors with limited funds to invest in high-priced, high-quality stocks. For example, if the share price of a high-quality stock is as high as 1,000 yuan, and the investor only has 800 yuan available for investment, if fractional trading is supported, the investor can buy 0.8 shares of the stock; if fractional trading is not supported, the investor will miss the investment opportunity due to insufficient funds.
On the other hand, fractional share investment can ensure that investors' funds are fully utilized. Assuming that an investor has 4,500 yuan available for investment and the target stock price is 600 yuan, if he cannot buy fractional shares, he can only buy 7 shares, and the remaining 300 yuan of funds will be idle; through fractional share investment, the investor can invest all 4,500 yuan to buy the corresponding fractional shares, thus maximizing the use of funds.
Conclusion
In summary, there is no standard answer that applies to all investors on how many shares of stock to buy. Instead, it is necessary to make a judgment based on one's own actual situation. Investors need to focus on the following key factors:
The first is the amount of funds available for investment, which is the basis for deciding the number of shares to purchase;
The second is whether it is necessary to diversify the investment portfolio and the degree of diversification, which is related to the control of investment risks;
The third is whether the selected broker supports fractional share trading, which will directly affect the flexibility of investment and the efficiency of capital utilization.
