The share price of certain companies or funds can become quite high over time.
That is one reason why many companies split their shares once they reach a certain value. To make the shares affordable to a wider range of investor.
For example, should you wish to acquire even one share of Berkshire Hathaway Inc. (BRK-A) class A shares, you would require just under USD 112,000.00 as at June 13, 2011. A little too expensive for most individual investors.
And for smaller investors, even stocks like Google Inc. (GOOG) at about USD 505.00 or Apple Inc. (AAPL) at about USD 330.00 might be too dear for inclusion in a diversified portfolio.
So what does one do?
According to this article from The Wall Street Journal ,
At consumer investing website ShareBuilder.com, you can buy a partial stake in about 7,700 securities—including Apple, Google, McDonald’s, the iShares Russell 2000 Index Fund and the Vanguard Bond Index Fund. There’s no minimum investment requirement and you can set up automatic investment increases as often as weekly. But there are pertrade and selling fees.
Note that ShareBuilders is part of ING DIRECT Investing, Inc.
Other brokerage houses may also offer partial share purchases in varying degrees. But the availability of this service may differ from country to country. So check with your own broker if interested.
My Thoughts on Partial Shares
I think it is interesting, but I probably would not recommend its use as general practice.
Most small investors should stick with funds and other built-in diversified investments. Over time, as one’s capital amasses, then look at investments that require higher capital outlays.
If you have your heart set on Google shares, and you cannot afford them outright, partial share purchases may make some sense. That said, you can easily find a low-cost mutual or exchange traded fund (ETF) with substantial exposure to Google.
For example, as at June 13, 2011, 5.34% of the Vanguard Information Technology ETF (VGT) is made up of Google shares. The same fund holds 12.73% of its assets in Apple shares, if Apple is your company of choice.
An exception might be for young children. I know many parents that attempt to interest their children in saving and investing through shares in companies that the children can relate to. Apple, Walt Disney, McDonalds, etc., are possible options. But the objective here is more to develop the child’s interest in investing, not to invest on an optimal basis.
A concern with partial shares is transaction costs. The more trades required to acquire a single share, the greater the investment costs. Given the ever lowering commission charges, this becomes less of an issue. But still, every dollar counts. And if you have to incur the same commission five times to obtain one single share of a company, the costs pile up.
And with the Vanguard ETF cited above, the annual expense ratio is a modest 0.24%.
Accumulate Cash, Then Purchase
If you do not have the capital to purchase your investment in one go, you can buy partial shares. Or you can just defer your purchases.
I prefer accumulating funds in a money market account (or brokerage account that sweeps cash balances into liquid investments that provide a positive yield) and then buying the desired shares or units. This gives you some positive return on your cash as you save it. In your chequing account you will not get any interest income, in most situations.
If you are dollar cost averaging  for individual assets, then you can accumulate cash weekly/monthly and purchase shares quarterly/semi-annually. I find that still allows you to reasonably smooth your investments, yet helps reduce transaction costs to some extent.
Or you can use dollar cost averaging to accumulate substantial positions  in specific assets through periodic investments in funds. With the Vanguard ETF above, your USD 100 investment may only provide USD 5.34 worth of Google share exposure. But if you continuously purchase the ETF, over time your total portfolio exposure to Google will grow.
Transaction Fee-Free Investing
As well, there are a myriad of investment options that avoid transaction fees altogether.
Direct Stock Purchase Plans (DSPP), Dividend Reinvestment Plans (DRIP), Employee Stock Purchase Plans (ESPP) , are options to consider for share purchases.
For mutual funds, automatic fixed dollar purchases can be made in many no-load open-end mutual funds. You can buy these directly through the mutual fund company.
Note that one should seldom, if ever, invest in mutual funds with front or back loads . Stick with no-load funds and avoid transaction fees.
If you avoid load funds, you should not generally pay any commissions when buying or selling mutual funds. To compete with the fund companies, many brokerage firms now offer commission-free mutual funds  if you purchase the funds in your brokerage account. Quantity and quality of these no-transaction fee funds varies between brokerage houses, so compare firms when deciding where to place your money.
While partial share purchases are an interesting idea, there are plenty of lower cost means to invest in high priced companies.
Primarily, stick with well-diversified, low-cost funds. You will get adequate exposure to the high priced shares for a reasonable cost. Use dollar cost averaging to slowly build positions over time while keeping your costs under control.
If you do want to invest directly in expensive companies, see if they have DSPP or DRIP programs in place. Or simply accrue your cash in an investment vehicle that provides a positive yield, then buy the shares when you achieve a critical mass.