This new feature from Robinhood will let you buy cannabis stocks for $1…
To invest in cannabis stocks, you need to open a brokerage account.
Our own National Institute for Cannabis Investors members have found TD Ameritrade, Fidelity, and E*TRADE to be particularly intuitive platforms.
Setting up an account online can take as little as 10 minutes, and the customer service departments for these trading platforms are more than happy to walk you through the process if you need help.
- TD Ameritrade Customer Service – 1 (800) 669-3900
- Fidelity Customer Service – 1 (800) 343-3548
- E*TRADE Customer Service – 1 (800) 387-2331
In addition to the services listed above, there is also Robinhood.
At one time, Robinhood’s claim to fame was offering commission-free trades. There are only a few cannabis stocks listed on Robinhood at this moment, however, and several other brokerages now offer commission-free trading – negating Robinhood’s previous competitive advantage.
But the company has another trick up its sleeve.
It will soon offer fractional shares.
As an example, you could buy 0.10, 0.25, or half of a share.
That means you can buy shares of certain companies for as little as $1.
Fractional Shares & Constellation Brands
Constellation Brands (NYSE: STZ) is a stock that you want to buy and hold forever.
It has some of the most well-known alcoholic beverages in the world in its portfolio (Corona, SVEDKA Vodka), and Constellation had the foresight to invest in Canopy Growth Corp. (NYSE: CGC) back in 2017.
If cannabis sales take a bite into alcohol sales, Constellation is covered. If they don’t, Constellation still has a whole new revenue source that will help it make more money than ever before.
It’s a win-win strategy and, with a new CEO at Canopy, Constellation’s investment should start to pay off.
Newer investors may view Constellation stock as just “too expensive,” trading at nearly $190 per share.
Here’s the thing, though – there’s still plenty of money to make even if a stock seems “too expensive.”
Back in August, we gave you a full report on why Constellation Brands is a company you want to own forever. You can access it here.
The “Expense” Issue Debunked
Amazon.com Inc. is a perfect example of this misconception.
On December 31, 2014, the Amazon stock price traded for $311 per share.
It was called too expensive.
On December 30, 2016, the Amazon stock price traded for $766. It was called too expensive.
On December 31, 2019, the Amazon stock price opened at $1,842 per share.
Once again, many are still calling Amazon stock too expensive.
And that’s the point.
When you have a company like Amazon or Constellation Brands, the stock price is going to keep climbing, so it’s always going to seem too expensive!
That’s why utilizing fractional investing is a perfect strategy when you have a long-term winner in front of you.
The Fractional Share Investing Strategy
With fractional shares, Robinhood says you can buy stock in certain companies for as little as $1 per share.
Instead of paying $200 all at once, you could buy $50 worth of STZ stock each week for 4 weeks.
After that, you will own more than one full share.
That’s a great investing strategy for Constellation Brands.
Reflect on your investing goals, think about the companies you want to own forever, create a plan with fractional investing, and start executing.
If you are new to cannabis investing and just want to dip your toes in the water, you could automatically invest $5 each week in STZ.
You can slowly build your position over time and watch it grow. Constellation offers the security of being in two sectors that will never go out of business while also offering a high-growth opportunity through cannabis.
On top of that, Constellation rewards its shareholders with a dividend of $3 per share.
There appears to be a waitlist for fractional investing right now, but I will have more news as it breaks.
There’s another feature Robinhood is launching that I will send more information about soon because you can utilize your dividends to buy more shares of a company.
Executive Director, National Institute for Cannabis Investors
15 responses to “How to Use Fractional Investing from Robinhood”
January 03 2020