If you've ever read anything about investing, you probably know how important diversification is. Diversifying your portfolio means you spread your money around so you don't put all your eggs in one basket. It allows you to avoid catastrophic outcomes if one or two investments perform poorly, and it maximizes the chances your portfolio will do well over time.
In the past, though, there was just one problem: Diversification required quite a bit of money. That's because buying shares of multiple different stocks could come at a big cost. Now, however, fractional shares have made diversification easy.
Fractional shares allow you to buy portions of shares of exchange-traded funds (ETFs) so you don't need to pay the price of a full share to invest in an asset. ETFs pool your money with other investors and use the big pot of cash to buy assets that share common traits. They trade like stocks, and generally have very low fees, which makes them a great option for investors without a lot of money or investing knowledge.