How to own Nvidia, Apple and other US stocks without making a big investment?

Most expensive stocks in India could be out of reach of Indian retail investors. MRF, Page Industries, Honeywell Automation, 3M India, and Shree Cements share prices range from Rs 25,000 to Rs 1.10 lakh. In India, you cannot buy a fraction of a share. This means that investors cannot buy a portion of these high-priced equities by investing less money. To own these equities, Indian investors must pay the full price for each share.

The rules in the US stock market are different, and investors can purchase fractions of a stock. The US Securities and Exchange Commission (SEC) allows for fractional ownership of equities.

This allows investors to buy shares in some of the world’s most valuable corporations without paying full price for a single stock. You can own fractional shares of top American companies in the S&P 500 or Nasdaq 100 indices for as little as Rs 500, even if their shares are more expensive.

Warren Buffett’s Berkshire Hathaway (BRK.A) stock price is approximately 6.7 lakh dollars, nearly Rs 5.69 crore! Similarly, owning one Apple share costs more than Rs 20000.

However, as fractional investing is permitted in the United States, acquiring US equities remains more affordable than purchasing shares on Indian stock exchanges.

By purchasing equities through fractional ownership, you will also benefit from dollar cost averaging (DCA), similar to how a Systematic Investment Plan (SIP) works in mutual funds. DCA is a method of investing a fixed sum at regular intervals to buy more shares (or a larger fraction of a share) when prices are low than when prices are high.

Fractional ownership allows you to own a portion of a stock that you might not be able to afford otherwise. The term fractional investing describes stock ownership of less than one complete share. For example, if a company’s stock sells for $1,000 per share and you buy $200 worth of it, you will possess 0.2 or 20% of a share. With fractional ownership, investing is much more affordable.

So, you may buy a chunk of Tesla stock for Rs 5000 per month or fractions of Nvidia, Amazon, Microsoft, Apple, and a few others for Rs 50,000 per month. In this way, you can begin constructing a long-term portfolio of US companies within your budget.

Fractional Investing may be used to hedge the portfolio with overseas diversification if you have a limited budget and wish to diversify across US stocks. You can start an international stock portfolio with a $1,000 investment in fractional shares of leading US businesses.