When the investing apps Robinhood, Acorns and Stash came on the scene, a new type of saver emerged, one who could save money when making purchases (a microsaver). Then came the microinvestor, a saver who could buy small-dollar amounts of shares of stocks.

Microinvesting enables the purchase of less than a full share of a stock. Someone who had only $50 to invest could purchase a fraction of a share of, say, Apple, even though a full share costs more (about $119, as of the close on Nov. 12).

A few days ago (Nov. 9), the U.S. Securities and Exchange Commission issued an Investor Bulletin (“Important Items to Consider Before Investing in Fractional Shares”) on the subject -- it’s worth a read.

Fractional share investing is innocent enough. What did the SEC want investors to know?

Fractional shares are offered only by some, not all, brokerage firms, with Fidelity Investments and Charles Schwab Corp. among the recent entrants to the field. That limits firms that will execute fractional share buy-and-sell orders -- and the firms that will receive fractional shares if you intend to transfer your account to another brokerage firm.

When you research firms that offer fractional shares, find out about these potential differences.

1. Can I buy and sell any stocks, or are there limits on the type of stocks and other investments that are eligible for fractional share trading on your platform?

2. What are the details of order execution? Are trades executed in real time? Or do you aggregate orders for execution after collecting orders from other buyers and sellers?

3. Are there specific order types that are available (or limited) to buy or sell fractional shares? Some firms only allow market orders, according to the SEC.

4. Do minimum dollar amounts apply? For example, Schwab has a minimum order of $5, while Fidelity’s minimum order is a penny, and Robinhood’s is $1. (Be sure to double-check these amounts online; they may change.)

5. What happens to dividends earned on fractional shares, and what about corporate actions? According to the bulletin, fractional share owners do receive dividends and participate in other corporate actions such as stock splits or reverse stock splits.

6. Do I have voting rights? That depends, based on the brokerage firm, according to the bulletin.

7. Is there a charge for trading? Some firms charge. Some don’t. You’ll have to ask.

8. Can I sell at any time? The bulletin points out that liquidity may be limited: “Some brokerage firms have indicated that they do not guarantee the liquidity of fractional shares, even if fully shares of the stock are liquid.” Be sure to find out.

For more information, read the full SEC Investor Bulletin at tinyurl.com/yx9a4jkq. Also, the Financial Industry Regulatory Authority (FINRA) provides information on microinvesting at tinyurl.com/yxqdmsal.

Because the offering of fractional share investing can lead to more investors, microinvesting is a clear win for the young or new investor. But be sure to do your homework first.

On another note, by popular demand, I am offering a repeat of my free virtual presentation “Investing in a Coronavirus Stock Market,” on Thursday, Nov. 19, at 10 a.m., sponsored by the Greenwich (Connecticut) Library. To register, go to tinyurl.com/yywjlxa5 or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary.org. This is part of the library’s financial and investment programs.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

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A reader of this column wants help with stock research tools; he is particularly interested in free or low-cost resources.

If I were a do-it-yourselfer, I would turn to nonprofit organizations, such as the American Association of Individual Investors (AAII) or BetterInvesting, for low cost, value and their culture of education.

Both of the organizations I’ve mentioned are focused on education, which means a lot to me. Their materials are intended to help you become a more informed investor.

On its website (aaii.com), the AAII offers a number of free products, including webinars. You also can look up any stock for free by entering the company name or stock ticker symbol in the search bar at the top.

Members have the unique advantage of studying pre-built screens that replicate the screens used by noted investors, such as Warren Buffett, Benjamin Graham and Geraldine Weiss, as well as other screens based on performance and on risks and returns, among other themes.

This alone is worth the price of membership, which is decidedly inexpensive. The annual “basic” membership is $49. There also is a “plus” membership at a higher cost. You can find out more about the plans here: aaii.com/join/indexc.

But before taking the plunge, you can sign up for a 30-day trial for a mere $1. The trial will allow you to explore and set up your own screens. It may take you the full 30 days to fully appreciate AAII’s resources.

BetterInvesting was previously known as the National Association of Investment Clubs. The site (betterinvesting.org) also offers free and low-cost educational materials.

BetterInvesting is known for its Stock Selection Guide (SSG). The SSG “organizes a company’s historical financial data to help investors identify the characteristics of quality growth companies and enable plotting of potential future growth from historical trends.” You can take a look at an SSG example at tinyurl.com/yxce68hv.

To get a better feel for BetterInvesting’s resources, sign up for a free three-month trial at tinyurl.com/y4mnu3kz. When you click through to sign up, note the red lettering that shows the membership at zero dollars. (On first glance, the shopping cart shows $19.99, but then goes to zero after applying a 100% discount.) For more information about membership, explore the website.

Once you sign up, you can register for a StockUp, which is a study on a particular stock. For example, on Nov. 10, Costco Wholesale (COST) is the subject of an online program sponsored by BetterInvesting. The program will include a review of the company’s business practices and financial reports. You’ll be able to see how to complete an SSG guide as well.

Armed with the AAII and BetterInvesting, there is no question that you will be a better-informed investor.

Finally, if you are a beginning investor, you may be interested in a free virtual presentation I am giving as part of the Investment Basics series sponsored by the Greenwich (Connecticut) Library. The topic: “Why a Portfolio Review Is Important and How to Do It.” The date and time: Thursday, Nov. 12, at 10:00 a.m. To register, go to tinyurl.com/yy3fu4qp or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary.org. This is part of the library’s financial and investment programs.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

Known as the “Big Five,” five questions can predict your ability to make good financial decisions. This is the conclusion drawn by researchers who conducted a study between 2012 and 2018 of 1,500 Americans to test basic financial knowledge.

The study “represents one of the nation’s first efforts to collect and analyze longitudinal data linking financial literacy to the financial outcomes of individual Americans over a multi-year period,” said FINRA (Financial Industry Regulatory Authority) Foundation President Gerri Walsh. Longitudinal studies follow the same people over a period of time to see what changes occur.

The FINRA Investor Education Foundation (FINRA Foundation) conducted the study together with the University of Southern California’s Center for Economic and Social Research, and The George Washington University’s Global Financial Literacy Excellence Center (GFLEC).

The research brief, “The Stability and Predictive Power of Financial Literacy: Evidence From Longitudinal Data,” was released Thursday.

Researchers concluded that “financial literacy has significant predictive power for future financial outcomes, even after controlling for baseline financial characteristics and a wide set of demographic and individual characteristics that influence financial decision making.”

The Big Five cover topics related to everyday economic and financial issues like risk diversification, how interest affects savings accounts and mortgages, and how inflation works. The questions were developed by the FINRA Foundation National Financial Capability Study (NFCS).

Researchers found that answering one additional question correctly (for example, answering two questions correctly instead of one) in 2012 “increased the likelihood that a respondent could meet a $2,000 unexpected expense in 2018 by 8%. Answering two questions correctly increased the likelihood by 16%, and three by 24%.”

The study focused on six different financial outcomes, three positive and three negative, and found that financial literacy in 2012 was “not statistically related to any of the negative financial outcomes documented in 2018, such as costly credit card behaviors or the use of alternative financial services, including auto title or payday loans, rapid refunds, pawn shops or rent-to-own shops.” The positive outcomes included being financially satisfied, planning for retirement and handling the $2,000 unexpected expense.

From my perspective as an advocate of financial literacy education, these are momentous outcomes. They underline the interplay between financial literacy and the ability to make good financial decisions.

From my perspective as a money manager who focuses on retirement portfolios, I am encouraged by Annamaria Lusardi’s comment: "We found that people with greater financial knowledge were more likely to plan for retirement and be able to cope with a $2,000 unexpected shock. Financial education and workplace financial wellness programs need to be fundamental pieces of rebuilding the financial well-being of Americans." Lusardi is the academic director of GFLEC and a professor at George Washington University.

I’d like to see more engagement with young people just starting their working careers to teach the value of saving early and the benefit of compounding over a long horizon. I’d also like to see financial basics taught at the grade school level. Everyone needs to learn how to save and invest for good reason: Someday they will need to create retirement income.

Share this link of the Big Five questions (surveymonkey.com/r/Big5FinLitQuiz) with your family and friends. Three of the five questions made up the “Big Three” survey, which I wrote about in February. Everyone should know the answers to these five questions.

On another note, I invite you to join me at a free virtual presentation, “Why a Portfolio Review is Important and How to Do It,” on Thursday, Nov. 12, at 10:00 a.m., sponsored by the Greenwich (Connecticut) Library. To register, go to tinyurl.com/yy3fu4qp or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary.org. This is part of the library’s financial and investment programs.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION