Is it worth buying 1-2 shares of Alphabet or Amazon?

Hi there!

What has to be worked on is the following:

1) Defining your portfolio size.

It wasn't stated in the question. So to help, there are different ways of purchasing the stocks. Some investors divide the capital by X numbers of stocks to own e.g $10,000 capital and 10 stocks to own = $1,000/stock. Some investors/traders enter by defining the risk. i.e Google cost $1400, they decide to cut loss at $1300. If they buy 1 share, it means they risk $100, and that $100 could be 1% of that portfolio if portfolio size is $10,000. 2) Defining your buy/sell criteria...

These criteria are to be thought of prior to buying. There are various strategies out there, those that state like 7 criteria or a certain step-by-step checklist and only purchase the stocks when it fulfils them.

3) Platform

Not all platform allows you to buy 1 or 2 shares of Alphabet or Amazon. Assuming that you know it since u highlighted, will just like to put it out here for others who may not know.

Interactive Brokers offers fractional shares purchase where individuals will be able to purchase stocks with a minimum of 1 share.

4) Commission

After taking into account the risk and reward that you will put yourself into you will also have to take into account the amount of commission you are paying. Commissions are something to think about as well. Take it as a cost of running business. If you are using Interactive Brokers, the minimum commission is $1. If you are buying just 1 stock and making a profit of $50. The $1+$1(upon selling) is still not bad.

However, if you are using other platforms that charge say $15 per transaction, your profit will essentially become $20 ($50-$30). In the event, that it is a losing investment/trade, it will be $80 loss ($50+30).

Essentially you are risking $80 to make $20. That doesn't sound profitable.

Hope the above helps shed some light.

Wishing you a bountiful investing journey!​​​

Hi anon,

I believe your question might be a matter of costs. This does depend on brokerage of the platform you are using.

Generally, I would try to keep the transactional costs to 0.5% or less of the brokerage cost. With Amazon at US$2400 now, that means that my brokerage costs should ideally be US$12 per trade or less. So if my broker charges US$20 flat for a single US stock trade, I'd probably buy 2 shares of Amazon to reduce my cost. This makes it more worth to me.

The harder question to answer is whether Amazon and Alphabet are companies you want to invest in. This will be based on your opinions after doing your research and analysis. Don't jump in blindly, have a plan, your own plan.