Amazon shares are in high demand because it is unquestionably one of the most successful brands today. You must have heard investment “gurus” advising you to invest only in stocks you believe in. While you may have faith in a brand, it is advisable to consult experts if you can to identify the best stocks to purchase. Companies like Amazon, Facebook, or Google are brands that everyone believes in and you can be confident that they will keep expanding.
How to buy Amazon shares as a newcomer:
- As an investor you can always buy company shares; while most companies will let you buy its shares directly, you must use a brokerage account for buying Amazon shares. You have to use AMZN/ Amazon ticker on NASDAQ to buy the stocks.
- The Amazon stocks typically are grouped under two categories, namely, limit order and market order. The market order lets you buy the stocks at the current prices while the limit order lets you set the maximum value you are prepared to pay for shares. When stocks exceed this amount, the order cannot proceed.
- When you are unable to buy complete shares, you may buy fractional ones via an online brokerage. Brokerage companies will provide many investment options like ETFs, mutual funds, bonds, and stocks. Brokerages may vary in the choices they offer and fees although most give commission-free stock trades.
- To buy Amazon shares, you must first decide how much you wish to invest. You should ideally invest only that amount that you can afford to lose. Stocks have risks, even if you are buying from a brand like Amazon. You can go through expert information on how to buy Amazon shares and be well informed prior to purchase.
- You should evaluate Amazon’s financials before investing; you can start with Form 10-K that refers to an annual report that must be filed with SEC by all publicly traded companies. This will give you an insight about how much money the company makes, company liabilities and assets, its competitors, its profit potential for the future, risks it faces, and how management team is incentivized.
- Find out if Amazon shares complement your portfolio. While the business may be profitable, stocks can fluctuate and you may be in for shocks. So, you need to see whether the company satisfies your needs, whether you can buy more stocks in case the prices fall, whether you need dividends that Amazon does not offer.
- How much you are prepared to invest will depend on your own financial situation. You have to give time for stocks to give returns because they are volatile by nature. So, you should have enough funds to last you for the next 3-5 years. It is advisable to follow a long-term approach because this will help you go through the stock’s ups and downs.
- When you are investing in individual stocks, you must not invest more than 3%-5%; this ensures you are not exposing your portfolio a great deal. When stocks have greater business risks, you must invest even lower amounts.
- Opening a brokerage account is compulsory even though it takes a little while. Identify a broker that can take care of your needs. When you buy few stocks but put in more money, look for brokers offering commission-free trades.
- You should choose a broker after research and then create an account. After funding the account, you may start placing “buy” orders for stocks.
- Finally, stick to dollar cost averaging strategy whereby you can allocate a predetermined sum of money to a position over time. This is beneficial when stocks fall because it allows you to buy more shares.