Can I Buy Just 1 Share of Stock? Yes, But Here’s What You Should Know

Have you ever looked at the price of Amazon or Google stock and thought, “Man, I wish I could invest, but I don’t have thousands of dollars lying around”? I’ve been there too! The good news is that yes, you absolutely can buy just 1 share of stock. But before you rush to place that order, there’s some important stuff you should understand about single-share investing.

The Short Answer: Yes, With Some Caveats

Let’s cut to the chase – there is technically no minimum number of shares you need to purchase when buying stocks You can buy just 1 share if you want to! But (there’s always a but, isn’t there?), whether it makes financial sense to do so is another question entirely

The Old Rules vs. Today’s Reality

In the past, financial advisors typically recommended buying stocks in blocks worth at least $500-$1,000 Why? Because of those pesky trading commissions When you had to pay $20 per trade regardless of how many shares you bought, purchasing just one share didn’t make much mathematical sense.

But times have changed, friends! The investing landscape has undergone a pretty dramatic transformation with:

• Zero-commission trading at most online brokerages
• Fractional share investing becoming widely available
• Trading apps making investing more accessible than ever

These changes have completely revolutionized how we can approach investing, especially for beginners or those with limited funds

The Math Behind Buying 1 Share

Let’s look at an example to see why commissions used to make single-share purchases impractical:

Imagine you want to buy 1 share of a company trading at $10, but your broker charges a $20 commission:

• Cost of 1 share: $10
• Trading commission: $20
• Total cost: $30

For this investment to break even, the stock would need to increase by 200% just to cover your commission cost! That’s… not great.

By contrast, if you bought 100 shares:

• Cost of 100 shares: $1,000
• Trading commission: $20
• Total cost: $1,020
• Average cost per share: $10.20

Now your stock only needs to rise about 2% for you to break even. Much more reasonable!

But with today’s zero-commission brokerages, this math has changed dramatically. If you’re paying $0 in commissions, buying a single share can make perfect sense!

Fractional Shares: Even Better Than Buying 1 Share

What if you can’t afford even 1 share of an expensive stock like Amazon or Google? That’s where fractional shares come in, and they’re kinda amazing.

Fractional shares let you purchase a portion of a stock based on a dollar amount rather than a whole share. So instead of needing $3,000+ for one share of Amazon, you could invest just $50 and own approximately 1/60th of a share.

Many popular brokerages now offer fractional shares, including:

• Robinhood
• Charles Schwab
• Fidelity
• SoFi
• M1 Finance

With fractional shares, you can create a diverse portfolio even with a small amount of money. It’s pretty cool!

Dividend Reinvestment Plans (DRIPs): Another Way to Buy Partial Shares

Another way to get fractional shares is through DRIPs (Dividend Reinvestment Plans). Here’s how they work:

1. You buy at least 1 share of a dividend-paying stock
2. When the company pays dividends, instead of giving you cash, they automatically use that money to buy more shares
3. Since dividends are rarely enough to buy whole shares, you end up with fractional shares

The beauty of DRIPs is that they typically don’t charge commissions or fees, making them super cost-effective for building your position over time. Plus, they take advantage of dollar-cost averaging, which can reduce your overall risk.

Practical Considerations When Buying Just 1 Share

If you’re thinking about buying just 1 share of stock, here are some things to consider:

1. Diversification Challenges

One share doesn’t give you much diversification. If you only have $100 to invest, buying one share of a $100 stock puts all your money in one company. That’s risky!

Instead, you might consider:

• Buying fractional shares of multiple companies
• Investing in low-cost ETFs (exchange-traded funds) that give you exposure to many companies
• Using a robo-advisor that creates a diversified portfolio for you

2. Brokerage Account Minimums

While there’s no minimum on the number of shares you can buy, some brokerage accounts require a minimum initial deposit to open an account. For example:

• E*TRADE: No minimum
• TD Ameritrade: No minimum
• Charles Schwab: No minimum
• Vanguard: Typically $1,000-$3,000 for most funds

Make sure to check these requirements before opening an account.

3. Round Lots vs. Odd Lots

When you’re buying or selling stocks, you might hear the terms “round lots” and “odd lots”:

• Round lots: Orders in multiples of 100 shares
• Odd lots: Orders of fewer than 100 shares

Historically, odd lots sometimes received slightly worse pricing or execution. While this is much less of an issue today, it’s worth knowing that institutional investors typically trade in round lots.

Fractional Shares and SEC Considerations

The Securities and Exchange Commission (SEC) has outlined several important points about fractional shares that you should be aware of:

• Availability: Not all brokerages offer fractional shares, and options may vary even within the same firm
• Trade Execution: Your fractional orders might be executed in real-time or aggregated throughout the day, affecting the price you receive
• Voting Rights: As a fractional shareholder, you might not have voting rights (depends on the brokerage)
• Liquidity: There might be liquidity concerns if the underlying stock becomes illiquid
• Transferability: Fractional shares typically cannot be transferred between brokerages

Pros and Cons of Buying Just 1 Share

Pros:

• Low barrier to entry: You can start investing with very little money
• Skin in the game: Owning even 1 share gets you engaged in following the company
• Learning opportunity: Great way to learn about investing with minimal risk
• Full dividends: You’ll receive the full dividend payment for your 1 share

Cons:

• Limited diversification: Putting all your money in one stock is risky
• Psychological factors: It can be discouraging to see small absolute returns
• Administrative hassle: Managing many single-share positions can be cumbersome
• Potential transfer issues: Some brokerages charge fees for transferring small positions

Is Buying 1 Share of Stock Worth It?

It depends on your goals and situation:

If you’re just getting started with investing and have limited funds, buying 1 share can be a great way to learn. But as your investment capital grows, you’ll probably want to build more substantial positions.

For expensive stocks (think Berkshire Hathaway, Amazon, Google), buying just 1 share might actually represent a significant investment. But for cheaper stocks, you might be better off buying fractional shares of multiple companies.

Better Alternatives to Buying 1 Share

If you’re working with limited funds, consider these alternatives:

1. Fractional shares: Invest small amounts across multiple companies
2. ETFs: Get instant diversification with one purchase
3. Index funds: Low-cost way to own the entire market
4. Robo-advisors: Automated investing with professional portfolio management

My Personal Experience

When I first started investing, I bought exactly 1 share of Apple. It wasn’t because I couldn’t afford more – I just wanted to “test the waters” before diving in deeper. That single share taught me how to place orders, how dividends work, and how to track performance.

Was it the most efficient investment strategy? Nope! But it gave me the confidence to start building a real portfolio. Sometimes that first step is the most important one.

Bottom Line: Yes, You Can Buy 1 Share (But Maybe You Shouldn’t)

The absolute minimum number of shares you can buy is technically just 1 share. And with zero-commission trading and fractional shares, there are fewer financial penalties for buying small amounts than ever before.

However, for most investors, especially beginners, I’d recommend either:

• Using fractional shares to build a diversified portfolio with small amounts
• Investing in ETFs or index funds that provide instant diversification

Remember, investing is a marathon, not a sprint. Starting with 1 share is perfectly fine if that’s what gets you in the game, but have a plan to build on that foundation over time.

So, can you buy just 1 share of stock? Absolutely! Should you? Well, that depends on your personal situation, but now you’ve got all the info you need to make that decision.

Happy investing, friends!

Yes, buying a single share is worth it, especially with commission-free trading, as it serves as a low-cost way to learn about investing, gain emotional investment in a company, and can be a starting point for future dollar-cost averaging.

Yes, you can buy one share of stock, as many brokers allow it and some even offer fractional shares so you can invest a specific dollar amount.