As one of the largest companies in the world, Facebook has been quite successful since its debut on the stock market in 2012. This social media company has become one of the main ways that people stay in contact with their family members and friends, although its platform recently experienced some problems with growth in Canada and the United States.
However, the company still has various avenues for expanding including its popular messaging service WhatsApp and Instagram. In this article, you will be able to learn how to buy Facebook stock, as well as what to consider before buying. Let’s take a closer look:
1. Analyze Facebook and its financials
Analyzing Facebook’s competitive position and financials is the most difficult part of buying stocks, however, it is the most important one. The best place to begin is by checking the company’s Form 10-K, which is an annual report that all publicly traded companies need to file with SEC.
This report can help you understand how it makes money and how much, its assets and liabilities, its profitability over time, their competitive landscape, and risks that they face.
2. Does Facebook make sense in your Portfolio?
Facebook is a well-known and growing company that generates a big revenue, so there is almost no portfolio that it does not fit into. But, the company has been under fire in recent years since Facebook users are worried about privacy violations. So, you will want to ask yourself these questions:
– Does a growth company fit your needs?
– Will you be able to analyze it as it grows?
– Will you be able to hold on to the stock if it drops or buy more?
– Facebook does not pay a dividend, so do you really need that in stock?
3. How much can you Invest?
This has nothing to do with Facebook, but with your own financial situation. Stocks can be quite volatile, so to give your investment time to work out, it is likely that you will need to leave the money in the stock for at least three to five years. What this means is that you will need to live without that money for at least three years.
4. Open a Brokerage Account
While it might seem difficult to open a brokerage account, it is in fact, quite easy and will take 15 minutes to set up. According to the experts from FX Daily Report, you will want to have a broker that will fit your needs and after you have opened the account, you will want to fund it with enough money to buy the stock or stocks you want. You can take care of this completely online and it is simple.
5. Buy the Facebook Stock
Once you have decided to buy the stock and you have opened and funded your brokerage account, you can set up your order. When you input your order, use the company’s ticker symbol – FB. On the broker’s order form, you will input the symbol and how many shares you can afford to buy.
Then you will need to enter the order type – market or limit. A market order will purchase the stock at whatever price, while the limit order will only purchase the stock once it reaches the price you specified.
Buying stocks can be quite exciting, but remember that success will not happen overnight. You should take a long-term perspective into your investments and you should consider taking advantage of dollar-cost averaging if you believe in the stock for the long-term.