Dollar based investing: The power of partial shares
Partial shares let you invest with any amount — which can make it easier to build a diversified portfolio, whether you have a little to invest or a lot.
GROW YOUR WEALTH
BY Moneytalk STAFF
September 2025
Ever walk into a clothing store and have something catch your eye? You like the fit and admire the quality, but the price is outside of your budget. The same thing can happen with high-priced stocks, but thanks to fractional shares, investors can focus on the dollar amount they want to invest rather than the asking price of a single share. Hiren Amin, Trading Insights Host at TD Direct Investing notes, “Partial shares can help to alleviate the concern of waiting on the sidelines if the cost per share seems too high.”
So, what exactly is a semiconductor?
Disclaimer
Money that’s sitting is money that’s not growing, but when you’re buying blocks of shares, how much you can invest is constrained by the share price. That’s less of a concern when a stock trades for just a few dollars, but once the price climbs into the hundreds, thousands or even hundreds of thousands (yes, it happens), buying solely in whole units can hold you back. Without fractional shares, you could end up sitting on extra cash while you wait to save enough for one more whole share — missing out on the chance to put all your money to work right away.
With partial shares, you can enter any dollar amount you want to trade, and you’ll receive a mix of full and partial shares to complete your order. That means you can invest in dollars instead of decimals and you won't leave money on the sidelines simply because the math doesn’t line up with pricing. “Time in the markets is key,” says Amin, and partial shares can help build a fully invested account.
Is there more to the sector beyond the interest in AI?
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TD Direct Investing is a division of TD Waterhouse Canada Inc. TD Wealth represents the products and services offered by TD Waterhouse Canada Inc., TD Waterhouse Private Investment Counsel Inc., TD Wealth Private Banking (offered by The Toronto Dominion Bank) and TD Wealth Private Trust (offered by The Canada Trust Company).
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The semiconductor industry has returned to growth largely thanks to the rapidly rising popularity of generative AI. Generative AI can take information in the form of text, audio, video, or computer code and build new content almost instantaneously. As a result, there is growing demand for these advanced computer chips. According to McKinsey, the global market for semiconductors could top US$1 trillion by 2030, up from US$600 billion in 2021.1
AI and machine learning require highly powerful semiconductors called Graphics Processing Units (GPUs), which were initially designed to quickly render video game graphics but have evolved to perform complex calculations of large data sets. McKendry points out that “GPUs are very good at the calculations that AI relies upon.”
While semiconductors already power smartphones, laptops, medical devices, appliances, cars, and certain lightbulbs, most of the attention these miniscule chips are getting today is around how they power AI's complex computations. “To an extent, the hardware is sufficiently developed to allow these AI technologies to permeate,” says McKendry. Currently only a few companies supply the steep demand for semiconductors for generative AI purposes and the value of those chips — and the companies that manufacture them — has grown exponentially.
When partial (or fractional) shares were first introduced, gaining access to a stock that might otherwise seem out of reach was seen as the main benefit. But increasingly, investors are discovering that partial shares offer other advantages too.
Here are some of the ways investors are making the most of fractional investing.
Put more money to work
Convenient dividend reinvestment
If you have a dividend reinvestment plan (DRIP), fractional investing can also help ensure you’re putting every dollar to use. Typically, your dividends are used to buy more stock, but if the amount isn’t enough for a full share, then whatever is left over is returned to you as cash. While cash is great to have, it only helps grow your portfolio when it’s invested. With dollar-based investing, even small dividend payouts are fully reinvested — no waste, no idle cash. For instance, if you own 20.5 shares you’ll get the full dividend on 20 shares and 50% of the dividend amount on the 0.5 portion.
Fractional shares can also make rebalancing more convenient. “You can take advantage of partial shares to allocate precise amounts of capital across a wider range of stocks,” says Amin. It’s clean, simple and gives you greater control, which is important when you are working toward a specific asset mix. This approach can also be helpful if you’re making regular contributions and want to stay aligned with your investment goals.
Rather than trying to calculate how many shares you need to buy and sell at different price points, you can allocate exact dollar amounts to each investment.
Simplify rebalancing
Buying fractional shares is like ordering a single slice of cake at a bakery instead of the whole dessert. You may not want — or have the budget for — the full cake, but you still want a taste. Many brokers and investing apps (including Easy Trade) allow you to purchase partial shares.
“We believe investing should be accessible for all,” says Amin. “With partial shares, Canadians can invest in the companies they want, regardless of the share price or how much they have to invest.”
Want to learn more about partial shares? Click here.
How to buy partial shares
Manager, Client Education Delivery at TD Direct Investing
Hiren Amin
You can take advantage of partial shares to allocate precise amounts of capital across a wider range of stocks.
If you have a dividend reinvestment plan (DRIP), fractional investing can also help ensure you’re putting every dollar to use. Typically, your dividends are used to buy more stock, but if the amount isn’t enough for a full share, then whatever is left over is returned to you as cash. While cash is great to have, it only helps grow your portfolio when it’s invested. With dollar-based investing, even small dividend payouts are fully reinvested — no waste, no idle cash. For instance, if you own 20.5 shares you’ll get the full dividend on 20 shares and 50% of the dividend amount on the 0.5 portion.
Convenient dividend reinvestment
Fractional shares can also make rebalancing more convenient. “You can take advantage of partial shares to allocate precise amounts of capital across a wider range of stocks,” says Amin. It’s clean, simple and gives you greater control, which is important when you are working toward a specific asset mix. This approach can also be helpful if you’re making regular contributions and want to stay aligned with your investment goals.
Rather than trying to calculate how many shares you need to buy and sell at different price points, you can allocate exact dollar amounts to each investment.
Simplify rebalancing