Best Platforms To Invest In Tesla Stock

Tesla Inc. is a leading producer of electric vehicles and batteries, with charismatic and controversial CEO Elon Musk at the helm. The company has become very profitable over the years, and its stock is traded on the NASDAQ exchange under the ticker symbol TSLA.

If you want to invest in Tesla, you'll need to open a brokerage account. You can then transfer money from your bank account to your brokerage account and use it to purchase Tesla stock.

There are several online brokers you can use to buy Tesla stock, including Fidelity, Charles Schwab, Robinhood, and Stash.

How to buy Tesla stock

Step 1: Open a Brokerage Account

If you don't already have an investment account, you'll need one to buy Tesla stock. You can open a brokerage account with a broker, and there are several online guides to help you with this. You'll want an account with no trading commissions, useful trading tools, and no account or inactivity fees.

Step 2: Research Tesla's Fundamentals

Before you buy Tesla stock, it's important to do your research. You're purchasing a small portion of an actual business, so you'll want to look at Tesla's balance sheet, income statement, competition, and management. You can access this information via your brokerage account or a financial information website.

Step 3: Decide Whether to Buy Tesla Stock

Consider whether buying Tesla stock aligns with your financial goals and risk tolerance. Think about how it fits into your portfolio—a strong portfolio has a mix of stocks and bonds, as well as other investments that aren't tied to the stock market, like real estate.

Step 4: Set a Budget for Your Tesla Stock Purchase

Consider how much money you have to invest and how much of your portfolio you want to tie to Tesla's business performance. It's recommended to have an emergency fund of three to six months' worth of expenses before investing. Also, consider when you'll need the money you plan to invest—stock market investments are usually long-term commitments.

Step 5: Decide When to Buy Tesla Stock

Tesla's share price can be unpredictable, so deciding when to buy can be challenging. You can buy right now at the current market price, or you can place a limit order to buy at a specific share price. Alternatively, you can buy Tesla stock systematically over time through dollar-cost averaging.

Step 6: Place Your Order

Once you've decided how much you want to invest and when to buy, log into your brokerage account and enter the ticker symbol for Tesla (TSLA) along with the number of shares or the dollar amount you want to invest.

Additional Considerations:

• Order Types: You can use a simple market order to buy shares at the current price, or you can use a limit or stop order to buy shares only if the price falls below a certain threshold.
• Trading Hours: Tesla is traded on the Nasdaq exchange, so you can buy or sell Monday through Friday from 9:30 a.m. to 4:00 p.m. ET.
• Fractional Shares: If you can't afford a whole share of Tesla, some brokerages offer fractional shares, which are portions of a whole share.
• Index Funds: Instead of buying shares directly, you can invest in Tesla passively by investing in a fund that holds its stock, such as an S&P 500 or Nasdaq index fund.

Brokerage accounts

If you’re investing for retirement, a tax-advantaged individual retirement account (IRA) is a good option. This type of account gets tax breaks from the government that can help your money grow faster.

If you want more flexibility with your investment account—for example, if you want to save for a Tesla of your own in the next few years—you probably want a taxable brokerage account. These let you invest for any purpose or time frame, though you’ll have to pay taxes each time you sell an investment for a gain or receive dividend income.

All brokerages are not created equal, so you’ll want to compare the fees, available investments, and services offered by at least a few to determine which is right for you.

• Fidelity: Its website offers a video tutorial and a step-by-step guide on how to place a stock trade.
• EToro: For a limited time, you can get $10 when you deposit $100 in your eToro account.
• J.P. Morgan Self-Directed Investing: Get up to $700 when you open and fund an account with qualifying new money.
• Webull: Open a new individual brokerage account and deposit $25,000 or more into the account during the promotional period to get 75 fractional shares, each valued between $3 and $3,000.

To buy shares of Tesla, you must have a brokerage account. You can't buy Tesla stock directly from the company.

Budgeting for your Tesla stock purchase

Before you buy Tesla stock, you'll need to set a budget. This will depend on how much money you have available to invest. You should also consider how much of your portfolio you want to allocate to Tesla and whether you're on track to meet your other financial goals.

• Emergency fund: It's generally recommended to have an emergency fund containing three to six months' worth of expenses. Even if you can't save that much right away, it's a good idea to start with a smaller amount, such as $500 to $1,000. This money should be kept in a high-yield savings account, not invested in individual stocks like Tesla.
• Time horizon: When investing in the stock market, it's generally recommended to have a time horizon of at least five years. This is because stocks can be volatile in the short term, and you want to give your investment enough time to recover from any potential downturns. So, make sure you're only investing money in Tesla that you won't need in the near future.
• Budget and fractional shares: If you don't have enough money to buy a full share of Tesla, don't worry. Several brokers offer fractional shares, which allow you to purchase a portion of a share. This can be a great way to invest in Tesla even if you're on a tight budget.
• Diversification: It's important not to put all your eggs in one basket. Make sure you're not investing too much of your portfolio in Tesla or any other individual stock. A good rule of thumb is that no individual stock should make up more than 5% of your portfolio.
• Risk and volatility: Tesla's stock price has been known to fluctuate significantly, and it's considered a high-risk investment by some Wall Street experts. So, if you invest in Tesla, be prepared for potential ups and downs and be sure to diversify your portfolio to manage your risk.
• Research and analysis: Before investing in any stock, it's crucial to do your research. Analyse Tesla's financials, performance, and future prospects to make an informed decision. Consider factors such as the company's revenue, profits, competition, and management. This will help you determine how much of your money you want to allocate to Tesla stock.

Timing your Tesla stock purchase

When a company’s share price is unpredictable, it can be hard to know when to buy shares. Here are some options to consider when deciding when to buy Tesla stock:

• 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 at the best possible price at the time of your trade. However, with a fast-moving stock like Tesla, you could end up paying more or less than what you were quoted by the time your order goes through.
• Buy Tesla stock at a specific share price: A limit order allows you to set the price you’re willing to pay, and the trade only takes place if the stock reaches that price or lower. This ensures some predictability in what you pay, but your order may not be fully executed, or it may not be 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.

Evaluating your investment

Performance Analysis

Monitor Tesla's financial performance by reviewing key metrics such as revenue growth, profitability, and market share. Compare these metrics against previous quarters and years to identify trends and assess if the company is meeting its financial targets.

Benchmarking

Compare Tesla's performance against industry benchmarks, such as the S&P 500 and Nasdaq Composite Index. This will help you understand how Tesla is performing relative to the overall market and its peers.

News and Analyst Ratings

Stay informed about Tesla's latest news, earnings reports, and analyst ratings. News and ratings from reputable sources can provide insights into the company's future prospects and help you make informed investment decisions.

Risk Assessment

Evaluate the risks associated with your Tesla investment. Consider factors such as the company's valuation, competition, and leadership changes. Overvalued stocks or stocks with high executive turnover may pose higher risks to your investment.

Portfolio Fit

Review how Tesla fits within your overall investment portfolio. Ensure that your investment in Tesla aligns with your financial goals, risk tolerance, and diversification strategy. Diversification can help mitigate risks by spreading your investments across various assets, sectors, and industries.

Re-evaluate Your Investment Thesis

Periodically reassess the reasons why you invested in Tesla. Ask yourself if those reasons still hold true. For example, if you invested in Tesla due to its focus on sustainable energy, evaluate if the company is still aligned with that mission and making progress in that direction.

Review Financial Statements and Expert Opinions

Analyse Tesla's financial statements, such as its annual reports (Form 10-K) and quarterly reports (Form 10-Q). These statements provide valuable insights into the company's financial health and future prospects. Additionally, consider seeking input from financial experts and analysts who cover Tesla.

By regularly evaluating your investment in Tesla, you can make informed decisions about buying more shares, holding your current position, or adjusting your investment strategy. Remember that investing comes with inherent risks, and past performance does not guarantee future results. Always do your own due diligence and consult with a financial professional before making any investment decisions.

Frequently asked questions