Is A $1000 Stock Expensive?
It depends on the company’s value and the number of shares the company is divided into. From outside, a $1,000 stock may look very expensive to buy but stock prices should be judged based on the company value.
For example let’s say company A and B are both worth $100,000.
If company A divides itself into 100 shares then each share of the company would be worth $1,000. But if Company B divides itself into 1,000 shares then each share of the company would be worth $100.
So as you can see even though Company A’s share/stock price looks expensive on paper but you’ll own a bigger portion of the company. Stock selling for a very low price does not mean you are buying a stock for very cheap.
What Is A Stock Split?
When a stock price of a company becomes high, the company can choose to split their shares into multiples pieces to trade for a lower price at the stock market. For example if Company A from above decides to do a 10 for 1 split then the 100 shares would become 1,000 shares and each stock price would split from $1000 to $100 each. The value of the company does not change. Companies do stock splits to reach more buyers in the market that has a lower amount to invest.
Long Term Vs Short Term ?
Once you buy and hold a stock for 12 months, it becomes a long term investment. On the other hand if a stock is bought and sold within 12 months period, it would be considered as a short term investment. The difference is made for capital gains tax purposes. As of 2025 for a single person, long term capital gains are taxed at a 15% rate for total income less than $533K and 20% rate for income more than $533K. On the other hand short term capital gains are taxed based on the persons regular income tax bracket.
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