Let’s say Investor A buys two shares of a stock at $500 and Investor B buys 200 shares of a stock at $5. Both investments cost a $7 transaction fee through an online broker. Both pay a 2% dividend yield. Both see 10% share appreciation across the next year.
And both investments do the exact same thing for your portfolio, to the penny.
So why are you scared to buy expensive stocks, even if you can only buy two or three of the shares? Just use a limit order to prevent your small lot from getting sucked up in the action of the market and remember that size doesn’t matter — only percentage gains.
In fact, these days you may be better served than ever before with going after expensive stocks. Cheap stocks like Bank of America (NYSE:BAC) are the target of high frequency trading algorithms. And though less common than it once was, expensive stocks do indeed see splits. Take Coca-Cola (NYSE:KO) which is set to split 2-for-1 in several weeks. Historically, a shares see a nice post-split bounce when actions like that take place.
Of course, share price alone isn’t a reason to invest in or avoid a stock. But to help you get past sticker shock, here are five particularly enticing stocks with share prices over $300.