You probably won’t be able to give Elon Musk your entire paycheck. To figure out how much you can afford to invest in TSLA, you’ll need to ask yourself a few questions.
- What is your financial plan? After you’ve paid all of your monthly bills, you can save and invest whatever money you have left. If you don’t already have one, you should put at least some of that money into an emergency fund, as well as retirement savings. The rest, however, can be directed toward other assets, such as Tesla.
- What is the current price of TSLA? Stock prices fluctuate all the time, but Tesla’s stock has been trading at more than $400 a share for the past year. As a result, you might not be able to purchase a whole share of TSLA quite now. Fortunately, several brokerages, such as Charles Schwab, Robinhood, Fidelity, and Stash, allow you to acquire fractional shares of stocks.
- What is your approach to investing? The majority of people invest in one of two ways: enormous lump sums all at once or little amounts over time. This latter strategy, known as dollar-cost averaging, can help you reduce your risk and spend less per share on average over time.
- What about the rest of your assets? If you’re already an investor, you should consider how Tesla fits into your portfolio. “According to Chip Workman, a certified financial planner (CFP) with The Asset Advisory Group, “every individual stock purchase should play a relatively minimal impact in the average investor’s portfolio.” “A decent rule of thumb is that no single stock should account for more than 5% of a portfolio’s value.”
Review Tesla’s Performance and Potential
It’s a good idea to do some study into Tesla’s financials, performance, and future outlook before buying Tesla stock—or any stock, for that matter. The annual reports (Form 10-K) and quarterly reports of a firm are the best places to start (Form 10-Q). Companies that are publicly traded, such as Tesla, are obligated to provide specific financial information in these reports.
These can be found on Tesla’s investor relations website or in the Securities and Exchange Commission’s (SEC) database.
You could also seek advice from specialists. Brokerage firms routinely issue commentary on key stocks and industries, while third-party evaluators such as Morningstar give in-depth research.
You’ll be able to select how much of your money you want to put into Tesla when you combine financial facts with expert knowledge.
Decide Your Order Type and Place It
You can purchase your first Tesla shares once you’ve decided how much you wish to invest. Log into your brokerage account and type in Tesla’s ticker symbol (TSLA), as well as the number of shares or dollar amount you want to invest.
You can buy shares at their current price with a basic market order, or you can use a more sophisticated order type like limit or stop to acquire TSLA only if its price falls below a specified level.
Because Tesla is traded on the Nasdaq exchange, you can buy it from 9:30 a.m. to 4:00 p.m. ET Monday through Friday. You can continue to place orders for a few hours before or after the market opens if your brokerage offers pre-market and after-market trading. Any orders submitted outside of the trading hours will be filled as soon as the exchange reopens.
Evaluate Your Investment
Whether you invest in Tesla or other securities, it’s a good idea to monitor their performance on a regular basis.
Starting with annualized percent return is arguably the most straightforward option. This allows you to compare TSLA’s performance over the course of a year to that of other companies or investments. You can also check Tesla’s financial data to see if it’s still going in the right path.
You may also wish to compare TSLA’s performance to industry benchmarks, such as the S&P 500 and Nasdaq Composite Index, in addition to other stocks. This will show you how Tesla is performing in comparison to the rest of the market.
Open a Brokerage Account
You’ll need to open a brokerage account to purchase and sell securities like stocks, mutual funds, and exchange-traded funds (ETFs). However, a brokerage is more than just a way to ride TSLA to the moon. It also includes all of the information and instruction you’ll need to be a successful investor, as well as many sorts of investment accounts tailored to specific objectives.
Tax-advantaged accounts are probably better for long-term investing, such as for retirement or a child’s college fund. Individual retirement accounts (IRAs) and 529s, for example, receive a unique tax credit from Uncle Sam, which can help your money grow even faster. However, you can only access the money in them without penalty at specific times (like as retirement) or for specific causes (such as your child’s educational expenses).
A taxable brokerage account is best if you want greater flexibility with your investment account—for example, if you want to save for your own Telsa in the next several years. These allow you to invest for any reason or for any length of time, albeit you will have to pay taxes each time you sell an investment or earn dividend income.
Because not all brokerages are made equal, you should examine the fees, available investments, and services offered by at least a handful to figure out which one is best for you. You can also look through our recommendations for the finest online brokers.
Purchasing Tesla stock is simple once you’ve chosen the right brokerage for you: Simply enter its ticker symbol—TSLA—along with the number of shares you want to purchase. You can also specify a monetary amount and let your broker figure out how many shares (or sections of shares) you can purchase.
Purchasing TSLA, however, does not end here. To make sure you’re investing your money as wisely as possible, follow the next four steps.
Is Tesla a bond seller?
Tesla has used convertible debt, or bonds that can be converted into common stock if the stock price rises enough, to fund its expansion and growth since 2013. As I already stated in September:
“In 2013, it issued $600 million in convertible bonds, followed by $2 billion in 2014, $850 million in 2017, and an additional $1.6 billion in 2019.”
What’s the story behind Tesla’s fixation with convertible debt? Tesla, it turns out, is nearly the poster child for issuers of convertible bonds. A non-investment grade, high-growth company that isn’t a classic straight debt issuer is a typical convertible issuer. Tesla, in particular, is a speculative grade technology business. Tesla’s first convertible bond was not even rated by one of the main credit rating firms when it was issued in 2013…. Tesla was able to get away with providing its investors a very low coupon—that is, the annual interest rate paid until the bond matures—by issuing convertible bonds. For example, its 7-year convertible bond, which was issued in February 2014 and will mature on March 1, 2021, had a rate of 1.25 percent, while its 5-year convertible bond, which was issued in 2014, had a coupon of 0.25 percent!
Is it possible for me to purchase Tesla stock?
Purchasing Tesla is simple; all you need is an account with an internet brokerage. The price may be the biggest barrier, though some brokers sell fractional shares. Whether or whether you should buy Tesla stock depends on whether you already have a well-diversified portfolio or are just getting started with investing. Experts recommend that you set up at least three months’ worth of expenses in an emergency fund and pay off high-interest debt before investing in the stock market (like credit cards).
If you’re new to investing, start with index funds and diversify your portfolio with stocks, bonds, mutual funds, ETFs, and other assets. You should limit your exposure to any one stock because individual stocks are often more volatile than the general market.
Finally, keep in mind that even the hottest stocks might lose their appeal. Rather than focusing on picking market winners, a tried-and-true method is to invest in the market itself, and ride out the ups and downs over time.
Are Tesla bonds affordable or prohibitively expensive?
Finally, we believe that Tesla’s improving credit outlook is mostly due to its ever-increasing stock price. In this context, Tesla’s bonds appear to be excessively pricey for its rating, but far cheaper in terms of risk, when compared to rivals.
How much should I put into Tesla?
Tesla stock is currently trading at well over $1,200 per share. You can buy fractional shares in almost any stock for as low as $1. However, there are a few things to consider before investing to ensure that you get the most out of your money.
Is it safe to invest in Tesla?
- Tesla, the electric vehicle (EV) manufacturer, faces a variety of significant dangers in the next 5-10 years.
- Tesla automobiles could be overpriced due to tax incentives, and the development of its Gigafactory (battery factory) could take longer than projected.
- Tesla, in general, faces competition from both traditional automakers and alternative electric vehicle producers.
- Tesla’s future success will be determined in large part by its ability to expand its manufacturing capacity and infrastructure.
- Elon Musk, the CEO of Tesla, is strongly identified with the brand, and his grandiose objectives are matched by his proclivity for drama.
Are Tesla’s bonds worthless?
Tesla’s bonds were upgraded to BB from BB- by S&P Global Ratings. Tesla’s new rating is just one notch below BB+, the highest S&P rating in the high-yield—or “junk”—category. BBB-, the lowest investment-grade rung, is the next step up from BB+.
Who controls the majority of Tesla?
According to documents filed with the Securities and Exchange Commission, the tax transactions were “automatically performed” as part of a trading plan authorized on Sept. 14 to sell options that expire next year. He didn’t announce the sale until nearly two months later, on Twitter.
According to data provider FactSet, Musk was Tesla’s largest shareholder as of June, holding nearly 17% of the company. According to Forbes, he is the world’s wealthiest individual, with a net worth of roughly $282 billion, the majority of which is in Tesla stock.
What is Tesla’s bond count?
Tesla has four bonds on the market, the longest of which is due in 2025 (USU8810LAA18), and is also the most traded. The company’s 5-year bond, which has a B+/B3 grade, has a yield of about 3.5 percent, which is the lowest that comparable rated bonds can give on similar maturities.