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 accountfor 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 symbolTSLAalong 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 risky investment?
Tesla’s credit rating is still junk (despite the one-notch improvement, S&P ranks it BB-, three levels below investment grade), but S&P says the company’s credit outlook is improving because its cash reserve is expanding faster than the amount of debt it owes.
How can I go about purchasing trash bonds?
There are a few potential options for an individual investor to purchase junk bonds:
- Individual bonds can be purchased. You might be able to buy trash bonds using the trading platform of your online brokerage account, just like stocks or mutual funds. However, just like buying individual stocks, this is exceedingly hazardous because it concentrates your money in individual trash bonds, increasing the chances of losing your money.
- Bond funds are a good investment. Hundreds of low-rated bonds are represented via high-yield or junk bond mutual funds and exchange-traded funds (ETFs). By spreading your investment dollars over a variety of junk bonds, you reduce the risk of losing money overall. Remember that many of these funds are actively managed, which means that a team of professionals choose which bonds to include. This kind of knowledge could be especially useful for investors navigating unknown areas, such as the junk bond market, but it comes at a price. Junk bond funds will almost certainly have higher expense ratios than low-cost index funds, lowering long-term investment returns.
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 couponthat is, the annual interest rate paid until the bond maturesby 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 to acquire Tesla stock directly?
Tesla’s stock trades under the ticker name TSLA on the NASDAQ exchange. You’ll need to work with a broker to obtain shares. Tesla does not have a direct stock purchase program at this 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.
What is the rating of Tesla bonds?
Over the last year and a half, S&P has raised Tesla’s credit rating five notches, to BB-plus on Friday, one step below investment grade but with a positive outlook. Tesla’s credit rating was upgraded to Ba3 by Moody’s in March, a category that denotes debt that is somewhat speculative in nature and has considerable risk exposure.
According to experts and investors, Tesla’s strong stock priceits shares were trading at $1,069.27 in early afternoon trading Thursday, up 3% from Wednesday’s closeallows the firm to sell equity, as it did in December 2020 when it sold $5 billion of common stock, or issue additional convertible notes. When Tesla went public in 2010, its shares began trading at $17.
What is the minimum credit score for Tesla financing?
Tesla acts as a loan broker, and customers are encouraged to apply for financing through its website. When you submit an application, Tesla transmits it to its loan partners. Tesla will then forward any offers to you for your approval.
To apply for a Tesla auto loan, there is no specified minimum credit score requirement, however customers with the greatest credit scores (720+) typically qualify for lower-APR financing. In 2020, a Tesla buyer’s average credit score was 714.
Buying a Tesla
Tesla’s lender partners provide new and used car loans with APRs ranging from 2.49 percent to 72 percent and periods ranging from 36 to 72 months.
We recommend obtaining many auto loan offers so that you may compare and select the finest one. Consumers have a 14-day window to rate shop with the three credit bureaus. Applying to numerous lenders will not harm your credit score any more than applying to one, as long as you complete all applications within two weeks.
Leasing a Tesla
Leasing allows you to drive a new vehicle on a regular basis without having to pay the full price of the vehicle. The relatively low monthly cost is one of the best aspects of leasing. However, there are certain drawbacks. Even if you use less than half the vehicle’s life duration, a 36-month (three-year) lease costs about half the vehicle’s worth. Here’s more information about leasing vs. buying.
Are junk bonds dangerous?
A trash bond is a bond with a significant risk of the underlying company defaulting. Junk bond issuers are often start-ups or businesses that are experiencing financial difficulties. Investors in junk bonds take a risk because they don’t know if they’ll be repaid their principal and get regular interest payments. As a result, junk bonds pay a higher yield than their safer counterparts to help investors compensate for the increased risk. Because they need to entice investors to fund their operations, companies are willing to pay a high yield.