With over two billion daily active users on its platform, and about $ 155 billion ($ 120 billion USD) in annual sales, Facebook is a global phenomenon and revenue-generating juggernaut. It is worth noting that Facebook has recently rebranded Meta Platforms, Inc. If you’re interested in adding some meta stack to your portfolio, here’s how to get started.
How to Buy Facebook Stock (META)
1. Open a brokerage account
If you want to buy Facebook or any other shares, you need a brokerage account to handle the transactions. Available services, fees and investment options vary from one broker to another, so it’s best to shop around to find the one that suits your preferences. Check out our list of Best Online Brokers to Get Started.
2. Select an account to set your goals
Once you’ve settled on the right brokerage platform, decide what type of account you want. Your account choice should match your investment goals.
- Retirement Accounts. Registered Retirement Savings Plans (RRSPs) are tax-deferred savings accounts that allow you to save tax-free for retirement. However, you have to pay taxes when you withdraw the amount, including withholding tax if you withdraw before you turn 71. There are also annual contribution limits.
- Taxable accounts. Although taxable brokerage accounts do not offer any special tax benefits, you can withdraw money at any time and for any reason and contribute as much as you want. It gives you the flexibility to build general purpose wealth.
3. Decide how much to invest in Facebook
When buying individual shares, there are a few factors you should take into consideration. To determine how much money to invest in Facebook, ask yourself the following questions:
- What is your budget? Before buying a share on Facebook, consider your other budget items. After you pay the bills, make sure you are saving enough for retirement and that you have a solid emergency fund.
- What is the current price of FB? Like all shares, Facebook’s shares constantly fluctuate. You can certainly buy a single share of FB, but consider that you can also buy a share of the stock, which is called a fractional share. Two brokers, Interactive Brokers and Wealth Simple, allow Canadian investors to buy shares in part.
- What is your investment strategy? You can choose to make a single purchase of Facebook at the same time, or you can use the dollar cost averaging by buying the same dollar amount of stock at regular intervals, no matter what the price of the stock is. Dollar-cost-averaging can help reduce your volatility risk and save you money on the cost per share over time.
- What about your other investments? How does FB fit into your overall investment strategy? Do you have many other large cap technology stocks or is Facebook your first investment in this sector? Ensuring that you have a diverse portfolio representing a number of different industries and company sizes helps ensure a healthy portfolio.
4. Determine the type of your order and place your order
You can request to buy shares of your brokerage Facebook stock at current prices or use a more advanced order type, such as limit orders or stop orders. These types of orders buy shares only if the stock price falls below a certain threshold.
Facebook is traded on the Nasdaq Stock Exchange and its shares can be purchased or sold between Mondays and Fridays between 9:30 am and 4:00 pm ET. Given your brokerage platform option, Nasdaq allows pre-market and post-market trading.
The Nasdaq’s pre-market trading hours are from 4:00 pm to 9:30 pm and subsequent trading takes place from 4:00 pm to 8:00 pm. If you place an order outside of the hours that your brokerage allows you to trade, it will be processed after the business resumes. Maintains all records related to your brokerage business.
5. Be aware of currency conversion fees and taxes
If you are using Canadian dollars to buy US stocks, your brokerage will charge you a currency conversion fee of 1% to 4% on the regular exchange rate when you buy the stock and when you sell it.
These fees can be avoided by keeping your money in US dollars and depositing money in a US dollar bank account in the Bank of Canada or using Norbert’s Gambit with your brokerage.
This is called gambit when you buy an interlisted stock or ETF on American and Canadian stock exchanges. You buy Canadian shares of that stock or ETF, then you ask your brokerage to “journal over” your Canadian shares and convert them into American shares of the same stock, then you can sell your American shares in US currency and use US dollars in whatever American stock or ETF you want As a result of buying, like Amazon, without converting.
As for taxes, you are subject to a 15% withholding tax if your US investment generates a dividend. If your investment vehicle is under RRSP you will not be taxed by the IRS because this particular registered account is recognized by the IRS, not to every registered account in Canada.
6. Evaluate the performance of the meta
Once you have a meta stock, you should periodically review your investment and its performance.
To evaluate the performance of any stock, start by examining the annual percentage return. It gives you a number that you can compare to other assets by measuring how well your investment has performed in META.
Compare Facebook’s performance to benchmark indexes such as the Nasdaq 100 or the S&P 500. It shows how Facebook is doing compared to the stock market as a whole.
Since Facebook is a publicly traded company, it is required to submit Form 10-K annual reports and Form 10-Q quarterly reports to reveal its performance and financials.
Facebook provides this information on its investor relations site and can also be found in the US SEC database. If you see these reports as if you were trying to read a foreign language, try reading the expert analysis of these reports from sites like Globe Investor. The information revealed by Facebook, as well as the analysis of the experts you read, will help you determine if this is the right stock for your investment needs.
How to Sell Meta Shares
“Buy and hold” may be your best investment strategy, but ultimately you may want to sell your Facebook shares. The sale of shares works the same way as buying shares.
Open your online brokerage platform, then enter the Facebook ticker symbol, the number of shares or the dollar value you want to sell, and select the sales order type. They work much less like the purchase order types we described above.
If you make a profit on your investment on Facebook, you will have to pay capital gains taxes. The amount you pay depends on your annual income and how long you have had your Facebook stock. Partnering with a tax professional or certified public accountant (CPA) can help you determine how capital gains taxes can affect the sale of your META stock or other investments.
As a Canadian investor, you only need to offer capital gains to the CRA (50% of the growth value) and not to the IRS. The IRS expects capital gains from you only if you own 5% or more of the American corporation and that corporation’s primary asset is US real estate.
Additionally, if you happen to earn $ 5 million USD from your US investment, you will have to pay your estate estate tax when you die.
Invest on Facebook with ETF or Index Fund
One way to add a company to your portfolio is to buy shares in Meta Platforms. You can invest on Facebook by buying shares of index funds or exchange-traded funds (ETFs). Both are available through your online brokerage.
These types of funds combine a large number of stocks into a single fund, which is less risky than individual stocks. Instead of just counting on Facebook, you can diversify your holdings in hundreds (or even thousands) of different companies, increasing your overall growth prospects without betting on a single company.
It is important to note that Facebook is an important component of many index funds. For example, it is in the top 10 list of companies by index weight in the S&P 500, meaning buying a S&P 500 index fund gives META a better exposure when diversifying and protecting your investments.