The interesting thing about the current economic crisis is that like all economic downturns, at some point prices get so low that investors just can’t resist anymore and start buying again. When they do, they will stop the financial slump and get things moving again; this is true of just about all markets, whether it be real estate, stocks, and bonds. In the case of the latter, while the stock market has indeed lost trillions of dollars in value over the past year, many investors are definitely holding back from any major spending sprees, but they are definitely thinking about when to invest again. All those stocks that they could get so cheaply right now are going to increase in value again, hopefully soon, so once they do buyers are going to be very happy indeed. One way in which investors are approaching the stock market is through something called a folio service.
A folio service essentially allows you, the investor, to put your money into different stock portfolios offered by various investment web sites. They’re sort of hybrids between mutual funds and an online brokerage account. These folios are bundles or baskets of stocks that you can pick and choose from. Each folio will have anywhere from 10 to 15 different stocks in it. In order to access these folios, investors pay monthly fees to the Website.
One aspect of many folio services is what’s called dollar-based investing. Dollar-based investing allows you to buy as much as you can even if you don’t have enough to buy complete shares. So, if you’ve got $100 to invest, but the shares you want to buy come to $500, you can still get partial shares.
To learn more about folio services, mutual funds, partial shares and dollar-based investing, be sure to consult with a financial advisor. He or she can give you their professional advice as to whether or not you should put your money into a folio service.