Buying Netflix shares 2023 | How to invest in Netflix
Does the company’s growth — and the fact that you spend your weekends with Netflix — mean you should buy Netflix? Here’s all you need to know.
If you’ve watched “Stranger Things” or “Orange Is the New Black” before, you know how powerful Netflix programming can be. But does Netflix have the potential to double your money, too?
People who invested in Netflix years ago certainly don’t regret doing so. The company started trading publicly at about $1.20 per share in 2002, but its price is currently hovering around $400 and on October 1, 2021 it managed to reach its highest level at $688.
Like most of us, you too have probably imagined buying shares of a company that skyrocketed in value in two years to save you enough money to travel and ensure comfort for the rest of your life. Netflix may or may not be one of your best investment choices. The good news is that, unlike in the past, today you can only buy stocks in companies like Netflix online.
Although we do not specifically recommend buying Netflix stock, this article will walk you through in detail how you can buy Netflix stock and what you should consider before doing so. We also strongly advise you to get a financial advisor to make sure you make the right decision because this article is not intended to provide investment advice under any circumstances.
What should I do before buying Netflix shares?
Understanding the basics of Netflix stock
Netflix is an American company traded on NASDAQ under the ticker NFLX. It is known as one of the leading providers of subscription based media services. If you want to buy its shares, you need to find a broker who will give you access to NASDAQ because this is the main stock exchange where this company is traded.
In a fast-moving sector like the online entertainment industry, it’s hard to see which company might start producing popular original content, as Netflix has done.
This means that it’s important to do your research to make sure you fully understand the risks — from competing technologies, software, and more — so you can prepare for potential bumps in the road. Read the latest Netflix earnings reports. Then find out what the analysts are saying about the company and the industry so you can make the right investment decision.
Researching the company can help you learn about the risks and can highlight potential rewards. If, after doing your research, you decide that Netflix is a stock you want to invest in, read on.
Putting Netflix into context for your investment plan
Even if the company’s financial statements are excellent and its share price has no other trend than going up, this does not necessarily mean that buying Netflix shares is the right decision for you.
For example, you may already have a significant portion of your investment money in high-growth (and possibly high-risk) technology stocks. And you may not want to add more money in this sector.
Or maybe the money you can afford to lose is already tied up elsewhere. And you don’t want to put all the contents of your child’s college savings fund into one technology stock.
Another consideration is the time frame. Will you need that money in five years or less? If that is the case, then you should not put it into the stock market because in that case you do not have enough time to get out of the market crash.
The best way to make a smart investment decision is by having clear financial goals for these funds and knowing how diversified (or not) your overall investments are.
If you know you still have at least five years to go to need that money and investing in Netflix fits your overall financial plan, read on.
Constant access to the price of Netflix shares
Constant access to the price of Netflix shares is essential so that you can determine the right time to buy these shares in a way that suits your investment plan.
The price per share of Netflix shares is currently $ 403, with an increase of 1.43% over the past 24 hours. The current market capitalization of this company is approximately $179.15 billion with a trading volume of $6,516,511.
How much can you afford to invest in Netflix?
At this point, you have to answer two questions: How many shares do you want to buy? What type of order do you want to use?
As for the question of the number of shares, you can buy individual shares of Netflix from any online broker. Keep in mind that the decision of how much to invest should be based on a variety of factors. If you don’t already have a diversified portfolio and a solid emergency fund, for example, you might want to limit your investment in individual stocks like Netflix for the time being. If the Netflix share price is too high for you, keep in mind that some brokers will allow you to contribute by buying fractional shares, which are fractions of a share.
As for the order type question, two of the most common types are “market” orders and “limit” orders. With a market order, you are telling the broker to buy the shares as soon as possible. The final price may be slightly higher or lower than the price you see when placing the order. A limit order tells the broker that you only want to buy the stock at a certain price, with the caveat that if the stock is not available at the price you specified, your order will not be filled.
After making the purchase, you will have completed your investment in Netflix shares. You must remember to keep track of your stocks. At some point, you may find that it is time to sell them and take advantage of the rise in price.
Steps to buy Netflix shares
In this part of the article, we will give you some of the practical steps that you can follow to buy Netflix shares. You can follow these steps to buy any stock you wanted to invest in other than the Netflix stock.
Step 1: Find a good online broker.
The first thing you should look at while looking for a good broker is the exchanges they have access to. Not all brokers allow you to buy Netflix stock, simply because they don’t have access to the NASDAQ stock exchange. It goes without saying that you need a broker who will guarantee you access to this exchange if you want to invest in Netflix.
Not all brokers allow anyone to open an account with them; Some brokers can be quite expensive if you only want to buy one or two shares of Netflix occasionally. In this case, you can look for some completely safe and free brokers.
Step 2: Open your brokerage account.
After you find the right online broker, you will need to open an account. This is very similar to a regular bank account and the account is usually opened online only. With some brokers it is as quick and simple as opening a new Gmail account and with others it may take up to or two days for them to do some background check. Instead of storing money in a brokerage account, you will store your shares in it. So, you definitely need this account to buy and store Netflix shares.
Step 3: Deposit funds into your brokerage account.
You will pay cash to buy Netflix shares. This money must first be deposited into your brokerage account. This is usually very easy and quick, easier than even opening an account.
The most common way to deposit money is bank transfer and using a credit/debit card. With some brokers, you can even deposit into your investment account from electronic money wallets such as Paypal.
Step 4: Buy your share of Netflix shares.
You have the account, cash and target stake now. The last remaining step is to hit the buy button. All you have to do is log in to your online brokerage account, search for Netflix stocks, enter the number of shares you want to buy, click Buy, and your buy order will start to be executed.
When placing an order, you can choose from different order types. A market order buys at the actual market price, while a limit order allows you to specify the exact price at which you want to buy the stock.
Step 5: Track your Netflix shares regularly.
You’re not done buying your Netflix stock yet. Now you have to monitor your investments. This basically means following your own investment strategy. If you buy Netflix shares to keep them for a longer period, you can participate in the annual meeting and gather all the news and information about the company.
If you plan to sell your shares shortly after some price increase appears, you may use different position management tools. For example, you can set a target price at which you want to sell the stock at a profit, or use a stop-loss order to set the price at which you want to sell the stock in order to avoid losses.
Netflix stock trading fees
You have to count on different types of fees when you are trading Netflix stock.
Commission is a fee that is determined based on the trading volume and sometimes it is fixed for each trade. For example, 0.1% of every €10,000, $5 per trade or $0.005 per share.
These fees vary with different brokers.
How to reduce the risk of investing in Netflix shares
All investments have different levels of risk, and investing in Netflix is no different. Please take the time to do your research on these stocks and take all of the above considerations into account before investing your money. You can also take the following points into consideration so that you can reduce the risks related to this investment:
The Risk: Unfortunately, there are a lot of fake and unreliable “brokers” who will try to steal your money from you. You should question binary options ads and automated investment algorithms that promise to generate fantastic returns. In these cases, it would be best to avoid or disable these advertisements.
To avoid fraud, choose a trusted and approved broker in order to secure your money and investments.
Risk: Spending all of your savings on one or two stocks. If Netflix goes bankrupt, you will lose all your invested money.
To avoid bankruptcy, buy other different stocks as well and not just Netflix to diversify your investment portfolio. In practice, this means buying more different stocks and not putting all your money into one stock. The ideal number of stocks to have in a portfolio is between 20 and 30.
Disclaimer: The content of this article is for informational purposes only. The information provided should absolutely not be considered as an investment advice or recommendation. There is no express or implied warranty as to the accuracy of the information or data contained herein. Users of this article agree that Money Secrets does not accept responsibility for any of their investment decisions. Not every investment or trading strategy is suitable for anyone. See the risk warning statement.