How To Buy Amazon Stock – Financial Treat. Amazon.com Inc. (AMZN) has grown from the humble bookseller Jeff Bezos started in his garage into the world’s largest e-commerce company with a web services and vertical advertising business. AMZN has more than 200 million Prime members worldwide, with revenue of $117 billion in the first quarter of 2022.
Amazon’s stock has surged nearly 125% over the past five years — and that’s after the 2022 stock market crash. Shares of Amazon jumped more than 250% in November 2021 when the stock hit an all-time high. more than five years. If those numbers have you eager to hang your cart on Amazon, here’s what you need to know.
To buy Amazon stock, you need an online brokerage account. If you haven’t already, check out our list of the best brokers and best investing apps to speed up your search. Most brokers today allow free stock trading, but be aware of all fees and account minimums.
You should also consider your investment goals to determine what type of account you want.
If you want to save for retirement, choose an individual retirement account (IRA). This allows you to avoid capital gains tax in exchange for how and when those funds are used. Withdrawals for other purposes or at other times may incur taxes or penalties.
If you’re saving for more general goals, such as wealth creation or a down payment on a home, you may only need a taxable investment account that gives you immediate access to your funds without penalty.
Even Bezos doesn’t have unlimited cash to put into AMZN. Use these questions to find out how much you should invest in Amazon.
Before you pull the trigger and buy Amazon stock, do some research to make sure you’re comfortable with the direction and performance of the company. As a public company, Amazon is required to submit information about its financials to the United States. Securities and Exchange Commission (SEC). You can find these annual (10-K) and quarterly (10-Q) reports on Amazon’s Investor Relations page or by searching Amazon on SEC.gov.
Additionally, you can supplement these data points with expert analysis, such as those found on Fidelity, Morningstar, or Forbes, to determine if Apple appears to be a financially sound company to invest your money in.
When you’re ready to buy Amazon stock, log into your online brokerage account or trading app. Then enter the Amazon ticker symbol (AMZN) and the number of shares you wish to buy or the amount you wish to invest.
You may also need to select the type of order you wish to place. The two most common types are market orders and limit orders.
Like many tech companies, Amazon trades on the Nasdaq exchange, with regular trading hours from 9:30 a.m. to 4:00 p.m. Eastern Time, Monday through Friday. Your broker may offer additional pre-market and post-market trading hours.
Whether you’re investing in just one company or hundreds, it’s a good idea to review your investment performance on a regular basis, be it monthly, quarterly, or yearly. This way, you can see how your account is doing and assess whether any adjustments need to be made.
To gauge how your Amazon investment is performing, you can compare its performance to a benchmark index like the Nasdaq 100 or S&P 500. You can also track financial data available in public records to assess how Amazon has managed its finances over time.
Whether you’re looking to use your money to make a major purchase or invest in another company, at some point you’ll want to sell your AMZN stock. To do this, simply go to your brokerage or investment app trading platform, enter the ticker symbol and select the amount you wish to sell.
If you’ve made significant profits, it’s a good idea to meet with a tax professional, such as a certified public accountant (CPA), to develop a strategy for managing your potential taxes.
While investing in individual stocks can be attractive, investing in just one company leaves you vulnerable to potentially dramatic price swings. For this reason, financial experts recommend that most people invest in a diversified mix of index funds and exchange-traded funds (ETFs) that hold stocks in hundreds of companies.
Fortunately, AMZN is easy to find among these funds: it typically makes up 7% of Nasdaq 100 index funds and 3.5% of S&P 500 index funds.