is it pointless to buy few shares of expensive stocks?

[Stoney_21]

for example 10 shares of a stock like Tesla or 3 shares of chipotle?

 

[malaguti]

for example 10 shares of a stock like Tesla or 3 shares of chipotle?

The only thing I wouldn't have done is bought 1 share in something
Otherwise its not pointless at all. 3 shares still rise at the same rate as a 1000.
My view anyway

 

[Jack o'Clubs]

The only thing I wouldn't have done is bought 1 share in something

There's a good story in Money Mavericks (very good book about the experiences of a guy setting up a hedge fund), where he needs to hedge out an arbitrage with shares in Berkshire Hathaway and calls his broker to get a quote on the borrow... of one share...

To answer the OP: eh? If you're investing $1000 in a company it makes no difference if it's 4 shares of Tesla at $250 or 40 shares of EMC at $25. If it goes up 10%, it goes up 10%. The thing is to pick the right company.

 

[drtro]

Perhaps you should take up elementary math classes. 1% gain in 1 share of a $1,000 stock is the same as 1% gain in 100 shares of a $10 stock.

 

[new_trader]

Liquidity

for example 10 shares of a stock like Tesla or 3 shares of chipotle?

The advantage of owning stocks over an expensive asset like a house is the liquidity. You can’t really sell a portion of a house if you want to realise some of the capital gain whereas you can easily sell portions of your share portfolio. The advantage of liquidity diminishes with expensive stocks, which is why so many of them split.

If you are certain that you want to buy a stock and hold it forever, or, that you will buy and sell the lot (or very large portions) when the time is right, then it makes no difference how expensive the share is relative to its peers. What matters is the value of the stock.

 

[manateerex]

Depends on the capital you want to invest and also on the stock. TSLA is worth investing.

 

[hhiusa]

The advantage of owning stocks over an expensive asset like a house is the liquidity. You can’t really sell a portion of a house if you want to realise some of the capital gain whereas you can easily sell portions of your share portfolio. The advantage of liquidity diminishes with expensive stocks, which is why so many of them split.

If you are certain that you want to buy a stock and hold it forever, or, that you will buy and sell the lot (or very large portions) when the time is right, then it makes no difference how expensive the share is relative to its peers. What matters is the value of the stock.

Your statement about the house is partially incorrect, at least the United States and I'm fairly certain it applies to the UK as well. You wouldn't want to sell out a piece of your house anyway. You would instead take out a "second" as it is called or a home equity line of credit. If you bought your house for a $1,000,000 and now two years laters it is worth $1,100,000, the bank will give you $100,000 for the equity in your house. In a sense you are speculating that the house like you would with any fungible asset that the value of the asset will be worth more. You now have $100,000 cash and a house worth $1,100,000. When you pay back the $100,000, your house will have increased in value again to absorb the $100,000 that you pay back.

It would be nice to be able to do this with stocks. If I buy Apple 100 @ 130.00 and it rises to 135.00, then I have $500 in equity. In order to access it, I would have to sell 4 shares. I would instead like to be able borrow the $500 and keep the extra 4 shares in the event that Apple continues to rise.