Pfizer’s name recognition, one of the world’s largest pharmaceutical companies, recently came out thanks to the introduction of its COVID-19 vaccine.
Over the past 12 months, Pfizer’s shares have gained approximately 47%. To put that into context, consider that the benchmark S&P 500 index increased by just 17% over the same period.
If you’re considering investing your money in Pfizer’s stellar performance, here’s how to buy Pfizer stock.
How to buy Pfizer (PFE) stock
1. Do your homework
Before you start buying Pfizer’s stock, you need to do some research. The goal is to understand the company’s financial performance, company structure and their plans for the future, not to mention competitive threats.
As a publicly traded company, you can view Pfizer’s annual and quarterly reports on its Investor Relations website or the US Securities and Exchange Commission (SEC) database.
In 2021, Pfizer reported full-year revenues of $ 106 billion ($ 81.3 billion USD). According to Mike Clulo, Chartered Financial Analyst (CFA) and Portfolio Manager with EFG-Capital, Pfizer has a strong future.
“Investing in Pfizer can serve as a shock absorber to your portfolio when this epidemic lasts longer than expected,” says Clulo. He highlights that covidine-related products such as Pfizer’s commernati vaccine and paxlovid antiviral pills should account for approximately 50% of the company’s revenues in 2022.
Although Pfizer’s future post-infectious disease is less certain, Clulo is optimistic. “Pfizer is taking a clever approach to redistributing this short term [COVID-19] Fatal decline for long-term biotechnology assets [through mergers and acquisitions]”He said.
2. Select the brokerage
To purchase Pfizer stock, you must open a brokerage account. The broker acts as an intermediary between you and the stock market, facilitating the buying and selling of securities such as shares and bonds.
If you don’t have a brokerage account yet, look for accounts that have no trading fees and low investment minimums. Not sure where to look? There are several major online brokerages in Canada, including Questrade, Wealth Simple, TD Direct Investing, Interactive Brokers and more.
3. Select Account
Most brokerages offer multiple account options and you need to choose one that fits your financial goals. If you are saving for retirement, choose RRSP. RRSP is a tax-deferred savings account that allows you to build wealth up to an annual limit ($ 29,210 in 2022). You do not have to pay tax on its growth until you withdraw from your RRSP. You can withdraw money at any time, but by the end of the year you move to 71, you should finally start withdrawing.
If you want to invest to grow your money but don’t have a specific goal in mind and don’t want to worry about withdrawal penalties or investment limitations, opening a taxable investment account is another option. There are no tax benefits, but you are not limited to how you use the money or how much you can have in your account.
4. Calculate how much you can invest
Once you have a brokerage account, consider how much money you can afford to invest in Pfizer stock. When deciding how much to invest, consider the following:
- Take care of your budget first. After paying your bills, make sure you are earning money for retirement and your emergency fund. Then look at these three things to invest in stocks like Pfizer and decide how much money you have.
- Think about your investment strategy. Once you decide to buy Pfizer’s stock, you need to choose whether to invest in the total amount or use a dollar-cost average. Some people prefer a total investment if the price of the stock is particularly low, but a dollar-cost average allows you to buy shares at regular intervals and reduce your risk.
- How does Pfizer fit into your overall portfolio? Before investing in individual stocks, think about your goals and your remaining capital. Putting your portfolio in the same company is risky; For most, it is best to have a wide range of different assets.
5. Order for Pfizer
After deciding how much to invest in Pfizer, it’s time to buy the stock. Log into your brokerage account and enter the number of shares you want to buy, along with PFE-Pfizer’s stock symbol. If your platform allows you to buy partial shares, enter the dollar amount you want to invest in Pfizer. In Canada, only Interactive Brokers and WealthSimple offer the option to buy partial shares.
When buying shares of stock, you usually choose one of two general order types: limit order or market order. Market orders are completed immediately at current prices, but limit orders are processed only when the stock reaches the price you set. If you are expecting a price change, the limit order is a useful option.
Pfizer is traded on the New York Stock Exchange (NYSE), which is the world’s largest stock exchange. Its trading hours are Monday to Friday from 9:30 am to 4:00 pm EST, but you can take advantage of after-hours trading on most brokerage platforms.
6. Keep the currency conversion fee in mind
If you are buying American stocks with Canadian dollars, your brokerage will charge you a currency conversion fee. These fees range from 1% to 4% and are charged when you convert the Canadian dollar to the US dollar at the time of your purchase, and then when you sell your stock and convert your US dollars back into Canadian.
These currency conversion charges come at regular exchange rates, but they can be avoided. You can open a US dollar bank account in a bank in Canada and keep the American money you use to buy American stocks in US currency, or you can save on currency conversion fees by operating Norbert’s Gambit.
Norbert’s Gambit is when you buy an interlisted stock or ETF on American and Canadian stock exchanges. You buy Canadian shares of that stock, then you ask your brokerage to “journal over” your Canadian shares to the American list and make them American shares of the same stock. You can then sell your American stock and use US dollars to buy any American stock or ETF you want without converting the currency.
How to Sell Pfizer Stock
Finally you want to sell your shares of Pfizer stock. The process is simple: open your brokerage platform, enter the number of shares you want to sell and Pfizer’s ticker symbol and sell at the current price or set the minimum sale price.
If your investment is substantially higher in value, you may want to consult with a tax professional, such as a certified public accountant (CPA), before selling your shares. Selling in profits comes with capital gains taxes, so the CPA can talk to you through your options and discuss how to reduce your taxes.
As a Canadian investor in US stocks, you only pay capital gains taxes to the CRA, unless you own a 5% or more American corporation and the corporation’s primary asset is US-based real estate.
You also have to pay IRS estate tax if you make $ 5 million or more in your US investments when you die.
How to Invest in Pfizer through Mutual Funds and ETFs
Pfizer is a large company that has existed for decades. This does not mean, however, that Pfizer will continue to perform well. Like any other public company, Pfizer faces competition and market disruptions that affect its future.
“Pfizer is one of the winners of that epidemic … and represents a potential victim of its own success,” Clulo said. “As the company prepares to produce one billion vaccine doses every quarter by 2022, it is impossible to maintain this momentum in 2023 and beyond. Do investors have the patience to play a long story? That’s the question.”
To reduce your risk level, it is a good idea to invest in multiple companies rather than just one. Mutual funds and exchange-traded funds (ETFs) may be the most effective alternative, although you can invest by purchasing individual shares of different companies of your own. These funds invest in hundreds of thousands of companies at once, giving you instant diversification. And, many have incorporated Pfizer into one of their holdings.
For example, investors who wish to invest in Pfizer may purchase the BMO equivalent weight US Healthcare CAD Index ETF or iShares S&P Global Healthcare ETF (CAD-Hedge), designed to replicate the S&P 1200 Healthcare Index.