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What does that mean for your portfolio? Generally speaking – nothing.😯   Sometimes a company’s stock price (and value) can fall so hard, below a certain threshold, it puts them into “penny stock” status…or I would say “peasant” status.😆   Certain stock exchanges, like the New York Stock Exchange (NYSE) and Toronto Stock Exchange (TSE) require companies’ stock prices and valuations to be at a bare minimum level:   For example, a company listed on the NYSE has to have equity (market capitalization) worth at least $40 million and a stock price of at least $4 per share.   Being listed on these “prestigious” exchanges attract a broader base of investors and gain research coverage (exposure on Wall St/Bay St).🤑   Penny stocks = higher risk because they are generally companies that are in high growth stage. High growth = high risk. Some investors may not want these in their portfolios. Some portfolio managers are simply not allowed to have these high risk companies in their funds.🤷‍♀️   So, if a company’s stock prices fall below $4, they can do a “reverse” split to prop up the value of their stock price – but this does NOT change the overall value of the company. *video explains this*   A stock split, on the other hand, are for companies whose stock prices have run up so much that it becomes out of reach for investors, like you and I.🙄   For example, Warren Buffett’s company, Berkshire Hatheway Class A stock trades at around US$269,200 per share. Like 99.9% of the population would not be able to buy 1 share of this! And that’s how he rolls – he would prefer most people not buy his stock because he doesn’t want algorithms or day traders messing around with his stock. He wants investors to buy and hold his stock.🤷‍♀️   A company that would want a broader base of investors would split their stock (make their stock price lower) so it’ll be within reach for them. 🤠   *NEW CLASS*: The ETF Mastery Class! Learn how to build a professional investment portfolio the cheapest (and very easy) way! Sign up 👇 http://thesassyinvestor.ca/etf-mastery-class/

What does that mean for your portfolio? Generally speaking – nothing.😯   Sometimes a company’s stock price (and value) can fall so hard, below a certain threshold, it puts them into “penny stock” status…or I would say “peasant” status.😆   Certain stock exchanges, like the New York Stock Exchange (NYSE) and Toronto Stock Exchange (TSE) require companies’ stock prices and valuations to be at a bare minimum level:   For example, a company listed on the NYSE has to have equity (market capitalization) worth at least $40 million and a stock price of at least $4 per share.   Being listed on these “prestigious” exchanges attract a broader base of investors and gain research coverage (exposure on Wall St/Bay St).🤑   Penny stocks = higher risk because they are generally companies that are in high growth stage. High growth = high risk. Some investors may not want these in their portfolios. Some portfolio managers are simply not allowed to have these high risk companies in their funds.🤷‍♀️   So, if a company’s stock prices fall below $4, they can do a “reverse” split to prop up the value of their stock price – but this does NOT change the overall value of the company. *video explains this*   A stock split, on the other hand, are for companies whose stock prices have run up so much that it becomes out of reach for investors, like you and I.🙄   For example, Warren Buffett’s company, Berkshire Hatheway Class A stock trades at around US$269,200 per share. Like 99.9% of the population would not be able to buy 1 share of this! And that’s how he rolls – he would prefer most people not buy his stock because he doesn’t want algorithms or day traders messing around with his stock. He wants investors to buy and hold his stock.🤷‍♀️   A company that would want a broader base of investors would split their stock (make their stock price lower) so it’ll be within reach for them. 🤠   *NEW CLASS*: The ETF Mastery Class! Learn how to build a professional investment portfolio the cheapest (and very easy) way! Sign up 👇 http://thesassyinvestor.ca/etf-mastery-class/

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