Writer
Dayana is a former NerdWallet authority on investing and retirement. She has written for The Associated Press, The Motley Fool, Woman’s Day, Real Simple, Newsweek, USA Today and more. She has written and contributed to several personal finance books and has been interviewed on the "Today" Show, "Good Morning America," NPR, CNN and other outlets. depends on your goals, timeline and risk tolerance.
4. Set a budget for your Tesla stock purchase
This is partially dictated by how much money you have to invest. But you should also think about how much of your portfolio you want to tie to Tesla’s business performance, and where you stand in your progress toward other financial goals.
High on most lists should be an emergency fund. Experts suggest aiming for three-to-six months' worth of expenses, though even $500 to $1,000 is a good start. Your emergency fund should go not into an individual stock like Tesla, but into a high-yield savings account where it is safe and accessible.
It's wise to also consider when you'll need the money you plan to invest in Tesla — generally speaking, stock market investments should have a time frame of five years or more, meaning you should be thinking of Tesla as a long-term investment, and only investing money you won't need in the near future.
Finally, there's your budget. What if you don’t have enough to buy an entire share of Tesla? You may be able to purchase a
fractional share
— essentially a piece of a share. Several brokers now offer fractional shares of individual stocks.
5. Decide when to buy Tesla stock
When a company’s share price is somewhat unpredictable, it can be hard to know when to step on the gas and go forward with purchasing shares. The good news is that you have options. They are:
Buy Tesla stock right now:
When you're ready to buy Tesla stock in your brokerage account, you'll be given the option to choose between a market order and a limit order. A market order places the trade right away. It will be executed at the best possible price at the time of your trade. The potential downside is that with a fast-moving stock like Tesla, by the time your order goes through, you could end up paying more (or less!) than what you were quoted.
Buy Tesla stock at a specific share price:
A limit order allows you to set the price you’re willing to pay and only takes place if the stock reaches that price or lower. It’s a good way to ensure some predictability in what you pay. A possible downside: Your order may not be fully executed, or even fulfilled at all, if Tesla’s price swings so wildly that enough shares don’t become available before the order expires.
Buy Tesla stock systematically over time:
Dollar-cost averaging
takes some of the fear and guesswork out of deciding the best time to buy Tesla stock. Instead of buying all the shares you want in a single purchase, you spread out your trades and buy shares at regular intervals over time (days, months and even years). You can schedule these purchases based on price with a stop-loss or stop-limit order, as explained in more depth in our full guide to
how to buy stocks
.Neither the author nor editor held positions in the aforementioned investments at the time of publication.
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