Like most of us, you have probably
imagined buying shares of a company that skyrockets in a couple of years in
value, making you enough money to travel and chill for the rest of your life.
Maybe even GameStop was among your top picks for buying its shares, or it will
be. In reality, investing is a bit more complex than waiting for the birds
flying into your mouth ready roasted, but hey, you have to start somewhere
right?
The good news is that unlike back in the days, today you can buy
shares in companies like GameStop fully online.
While we do not specifically advise to buy
GameStop shares, this article explains in layman’s terms how you can buy shares
in companies in general, taking GameStop as an example. Whether your first
share to buy should be GameStop or not it’s for you to decide. We strongly
suggest to contact investment advisors as this article is not meant to be
investment advice under any circumstance.
Overview of GameStop
GameStop is a US Consumer Cyclical
company, traded on the NYSE under the GME ticker. It is known for selling video
games, electronics, and accessories, such as controllers or headsets. If you’d
like to buy its stocks you need to find a broker that gives you access to the
NYSE because that’s the main exchange it’s traded on (hang tight, we’ll get
into this in a bit).
All of this doesn’t mean that GameStop is
a good company or a bad one. As part of this example you might want to get
reminded of what you are considering investing in though.
Let’s see the steps now!
Steps of buying GameStop shares
Okay so for your own reasons you have
decided you’d like to buy GameStop. That’s a good start. Let’s see what lies
ahead of you before you can officially state that you are a shareholder of
GameStop! The process is rather similar for any company shares and again, we
only take GameStop as an example.
Step 1: find a good online broker
One of the characteristics of an online broker is the exchanges
they have access to. Not all brokers allow you to buy shares of GameStop,
simply because they don’t have access to the NYSE. Needless to say, you need a
broker that gives you access to this exchange.
The next important thing with a broker is that it should fit you as well. Not
all brokers allow every citizen to open an account with them; some brokers are
super expensive if you just want to buy a couple of GameStop shares every once
in a while, some brokers can be absolutely free. You can actually get great
recommendations on choosing the right broker using our questionnaire:
When recommending a broker, we take into
account different factors, like the broker’s fees, trading platform, accessible
markets to trade, and how easy it is to open an account. Safety is also highly
important, but since we recommend only safe brokers, you do not have to worry
about it.
Step 2: open your brokerage account
After finding your online broker, you need
to open an account. This is much like a regular bank account and opening one is
usually a fully online process. At some brokers it’s as quick as opening a new
Gmail account, at some brokers it takes a couple of days until they do some
background check on you. Instead of storing money on it you will store your
shares on this though, so you definitely need this to buy GameStop shares and
to store them.
Step 3: deposit money to your account
You will pay cash to buy those GameStop stocks. This cash first
needs to be sent (deposited) to your broker. This is usually super easy and
quick, actually even easier than opening your brokerage account.
The most common way you can deposit your money is bank transfer and using
credit/debit card. At some brokers, you can deposit to your investment account
even from different electronic wallets like Paypal, e.g. at eToro.
Step 4: buy the GameStop share
You have the account, the cash, and the
share target. The last step is to press the buy button! You log in to your
online brokerage, search for GameStop share, insert the number of shares you
wish to buy, and click buy, which will initiate the purchase of shares (in
trading lingo: execute the buy order).
A couple of hints around this: when
placing an order, you can choose from different order
types. The market order buys at the actual market price, while the
limit order allows you to specify the exact price at which you want to buy the
share.
Step 5: review your GameStop position regularly
You are not finished after you purchased
your GameStop stock. Now it is key to monitor your investments. This basically
means following your investment strategy. If you bought the GameStop share for
holding it for a longer term, you might participate in the annual meeting and
collect all the news and information about the company.
If you plan to sell it shortly after you
see some increase in the price, you might use different position management
tools. E.g. you can set the target price at which you want to sell the share
with a profit, or use the stop-loss to
set a price at which you want to sell the share to avoid further losses.
Now that you have mastered the 5 steps of
buying shares, take a moment to look at the top 5 brokers we have selected for
you.
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