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How To Buy Ford (F) Stock – Forbes Advisor Canada

Ford Motor Company, one of the world’s largest automakers, has been an American company since its incorporation in 1903 with traditional vehicles such as the Mustang and F-150.

The question now is whether Ford can provide reliable returns to investors in the coming years. Recent history has been positive: Ford’s annual average revenue has increased nearly 28% over the past three years, 17% compared to the S&P 500. But 2022, as of this writing, has proven to be a tough road for collisions, with a decline of 17% year-to-date.

The Shelby GT500 runs from zero to 60 in 3.3 seconds; A few minutes faster than how long it takes you to buy or sell a Ford stock after reading this guide.

How to buy a Ford (F) stock

1. Find a broker

Start by opening a brokerage account. There are many different brokerages out there, so look for one with a lower account — some $ 1 and allow you to open an account for a lower fee. Check out Forbes Advisors’ best online brokers and investment apps options to help you get started.

2. Select Account

After opening your brokerage account, you may have multiple account types to choose from. The account you choose depends on your long-term needs.

  • The broader economic goals are: The simplest way to buy a stock is to do it in a taxable brokerage account. If you eventually sell at a profit you will have to pay capital gains taxes – depending on how long you own the stock – but there are some restrictions on when or how you can sell.
  • Retirement Plan: Most brokers offer registered accounts, including Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSA) and Registered Education Savings Plans (RESPs). These are tax-advantaged accounts so you can deduct your contributions or enjoy your earnings growing tax-free. However, these accounts are subject to annual contribution limits and sometimes, depending on the account, there is a penalty if you withdraw before a certain age.

3. Decide how much to invest

Betting on a single stock, even if set up as a Ford, carries huge risks. That’s why Forbes Advisors believes that the lion’s share of your portfolio should be invested in low-cost, diversified index funds. If you are interested in buying a Ford stock, consider the following:

  • Current Finance: When investing in a company, you want to make sure the company is financially sound. Ford is publicly-traded, so it is required to file financial statements with the US Securities and Exchange Commission (SEC). You can view Ford’s Annual Reports (Form 10-Qs), Quarterly Statements (Form 10-Qs) and other filings on its Investor Relations page. These records can be invaluable; For example, you may find that Ford sold fewer vehicles in 2020 than it did in 2019 or 2018 due to the economic consequences of the COVID-19 epidemic. In 2021, the company – like many other automakers – had problems with a semiconductor shortage affecting its production.
  • Future plans: The financial landscape is constantly changing and you want to invest in companies that have sustainable plans for the future. It is good to review the presentations of the shareholders of the company to see what their plans are and whether you agree with the direction the company is heading. Ford is looking to increase its electric vehicle (EVs) business to compete in the burgeoning EV market, while retaining its popular traditional cars and trucks.
  • Stock Price: While some brokerage accounts allow you to buy partial shares or slices of individual shares in Canada, only two, Interactive Brokers and Wealth Simple, actually do, so you may need to invest enough money to buy the entire stock. As of March 23, Ford’s share price was $ 21.66 ($ 16.68 USD). Investing $ 1298.68 ($ 1,000 USD), regardless of the trading fee, allows you to buy approximately 60 full shares.
  • Existing portfolio: Investing in just one company is not recommended by financial advisers because there is a risk of losing money if the company performs poorly. Instead, experts recommend building a diversified portfolio by investing in multiple companies across multiple industries. When deciding how much to buy Ford stock, check the holdings of your portfolio and see how Ford supplies it.

4. Place your purchase order

To purchase a Ford stock, enter the trading platform of your brokerage account and enter Ford’s ticker symbol (F) and the number of shares you wish to purchase. If the broker issues partial shares, you can enter the dollar amount you want to invest instead.

When you order, you can usually designate an order type. The most common modifications are market orders and limit orders. Market orders are processed immediately at current prices during trading hours, but limitation orders are processed only when the stock reaches the designated price and it makes sense if you think the stock price will soon fall.

Ford is traded on the New York Stock Exchange (NYSE). The trading hours of the NYSE are Monday to Friday from 9:30 am to 4:00 pm ET. However, some brokers offer extended trading hours.

5. Be aware of currency conversion fees and withholding taxes

If you are buying US stock with Canadian dollars, your brokerage will charge you a currency conversion fee of 1% to 4%. When you buy a stock you will be charged once for converting your Canadian currency to the US dollar and when your stock is converted back to the Canadian dollar after the sale of the stock.

These fees can be avoided if you put your money in US dollars. You can keep what goes into your stock purchases in a US dollar bank account in a Canadian bank. You can also save on conversion fees by dragging Norbert’s Gambit.

If you’ve never heard of Norbert’s Gambit, when you buy an interlisted investment on the American and Canadian stock exchanges. You buy Canadian shares of stock or ETFs, then you ask your brokerage to “journal over” your Canadian shares by converting them into American shares of the same stock, then you can sell your American shares in US currency and use US dollars without converting any American stock or ETF such as Ford Result to buy.

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 US, not for every registered account in Canada.

6. Monitor the performance of your investment

Consider comparing its earnings with a related index, such as the S&P 500 Index, which tracks the performance of the top 500 companies in the US to monitor Ford’s performance.

Use the MSCI ACWI Automobiles and Components Index to compare Ford to its broader slate. The index tracks the performance of large and medium-cap stocks in many countries, and Ford is the third largest holding.

How To Sell Ford Stock

When it’s time to sell your stock, go to your brokerage’s trading platform and enter the number or dollar amount of shares you want to sell.

If you want to sell your Ford stock only after the company’s stock reaches a certain price, you can usually set an order for that price.

It may be wise to consult with a tax professional because selling shares at a profit may result in capital gains taxes, but a sale at a loss has its own benefits.

In Canada, as long as the company in question does not own US real estate as their principal asset, you will only have to pay capital gains on your investment growth on your Canadian income tax. With Canadian capital gains, you only pay 50% of the growth value of the investment.

The only other scenario where you have to pay tax is if you make $ 5 million USD on your US-based investments. In that particular case, you have to pay the estate tax to the IRS when you die.

Other ways to invest in Ford

Ford has existed for more than a century, but investing in a single company is always risky.

If you want to invest in Ford, but want to reduce your risk, consider investing in index funds or exchange-traded funds (ETFs). These funds allow you to diversify your portfolio without doing much homework, which gives you exposure to a wide range of companies.

Many index funds and ETFs have been exposed to Ford. In fact, there are about 200 ETFs that hold Ford as one of their holdings. For a broad market index fund exposure to Ford, you may want to consider a fund such as the SPDR S&P 500 ETF Trust (SPY). If you are looking for funds specific to the automotive market, look for funds like iShares Self-driving EV and Tech ETF (IDRV). But keep an eye on the fees.

If you are not sure which type of investment is best for you, contact an investment advisor to review your options.

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