If you want a share of the Amazon pie there is nothing wrong in it, Amazon has grown into one of the biggest US retailers and a one-stop-shop for all your consumer needs. Its stock values have escalated from only $88 a decade back, the brand is one of the few brands with a valuation of $1 trillion. No surprises then why more and more people are keen to buy its shares. Especially with the Covid pandemic taking the world hostage, consumers have been forced to order for essentials online on sites like Amazon.
How to buy Amazon shares:
While there is no one-click option for buying Amazon shares investing is not that complex. However, you must look at some things before you start buying Amazon stocks:
- To begin with, make sure to evaluate Amazon’s performance by checking numbers, the best way to do it is by accessing its latest annual reports. You can get an idea of its financial status because you will see its balance sheet, key disclosures, and income statement. You get an idea of Amazon’s long-term growth and long-term profit potential.
- You should observe the latest industry trends and conditions to see whether there are any strong competitors or if the brand can face legal problems.
- You should never decide on a stock depending only on its earlier performances or current prices. Rather, you must analyze Amazon share’s merits as investments. This implies researching the company’s revenue, net earnings, and its competition.
- You next task is to see whether Amazon shares will be a good fit for your investment portfolio. Individual stocks are likely to be riskier since they lack diversification. So, every time the company goes through rough times, your shares will also be affected. To avoid this, investors should diversify their investments and put money into low-cost mutual funds. Individual stocks must not constitute more than 10% of your portfolio.
- Another useful guideline when buying Amazon shares is to invest from time to time instead of investing your money at one time. When you use a dollar cost averaging plan you will acquire shares over time. Check out the guidelines to buy amazon shares here.
- As an investor, it is best to choose a long-term investment strategy if you wish to buy individual stocks. In case you are not sure about buying stocks even after researching well, you should use a robo-advisor.
- The next step is deciding how much you should invest in Amazon. Experts warn against buying stocks using funds that you may need in the following 5 years. So, make sure you already have an emergency fund in place. Since Amazon stock prices are high, you could consider fractional shares. This means buying a piece of share depending on how much money you can invest instead of buying an entire share.
- Amazon will never pay dividends if you buy its shares, so, your job is to focus on how far the Amazon share prices go up to get good returns on your investments.
- Finally, you must identify a good broker or exchange that lets you buy Amazon shares. Not every broker will let you open an account, some can be free while some are very expensive.