RE:explanationfabdaq2021 wrote: lol, well the initial stock split does absolutely nothing to the creation of wealth - it cuts the price of the shares in half (on a two for one) and doubles the shares you have - you are intitially even. However, companies that split stocks are usually very successful companies and do so repeatedly. The splits usually follow a pattern in that if the stock is split at $60 and its a two for one it will drive the price down to $30 and you've doubled your shares. At this point the process starts all over again with successful companies as over time (another few years) the price goes back up to $60ish and another stock split is announced. The Investment Reporter which is like the most successful newsletter out there always promoted stocks that did this. Stocks like Couche-tard and in my case Petro Canada and Precision Drilling. My example of success was with Petro Canada for example. I'll keep it simple, bought a block one year, then another the next. Bought at $30 and years later it went to 60ish. They did a two for one then years later another two for one and one time a three for one. In the end the price was always driven back up to around 60 but my initial 200 share purchase over a decade or so became 2400 shares. The investment reporter preached this type of investing and they had a list of stocks that tended to do this over and over and over! So without the splits in that example my shares would have had to climb to $720 a share and though not uncommon a price these days back then that would never have happened. Stock splits used to be the rage back in the day and I think its easier as an investor to take profits as you come into more shares. Hope this helped......and I think goeasy is a perfect candidate for such investing.
lol...this is such antiquated thinking. Stock splits USED to be done because a broker wouldn't sell you '5' shares of a stock. You needed to buy a 'board lot'. So the stock splits would be done as low as $25-$30 (Glentel) so retailers can afford to buy a board lot. Today's reddit 'traders' and millenials don't even know what a board lot is
There is no need for this anymore as anyone can buy ONE share of any stock for either zero commision or $9.95. Hence why you see CP, CN and many other blue chips trading over $100/share. You need to get with the times man, stock splits to absolutely NOTHING to your holdings but they do cap the price because of peny spreads and bloated floats. As I type there is 1 board lot available of GSY with a 41 cent spread...41 cents! Feel free to buy 2 shares if you don't have enough for a board lot there is no extra charge. This stock can move $1 with a 1-2000 share purchase because of the scarcity of the shares. NO to stock splits.