Ford Motor Company (F) is one of the largest automakers in the world by total sales and has some of the most popular vehicles. The F-Series pickup truck is the most popular vehicle by total sales in much of the South, according to Edmunds. Ford is also embracing the changing automotive market by introducing vehicles such as the all-electric F-150 Lightning. Here is the step by step process you need to follow if you want to invest in Ford Motor Company. You may want to consider speaking to a Financial Advisor which can help you determine if Ford’s actions will help your financial plan achieve your goals.
Ways to invest in Ford
Invest at Ford can be a great way to buy part of a company you love or find a worthwhile investment for your wallet. If you want to invest in Ford, there are two main ways, either to buy direct from Ford or in your invest in your own investment account. Here is a brief overview of each.
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Buy stock directly from Ford: One way to invest in Ford stock is directly with Ford through a program called Computershare. This method does not require an investment account like a brokerage account. Although it may seem like a more convenient way to go, you won’t be able to buy shares of other companies through Computershare. There may also be fees that you will not encounter with a discount broker.
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Buying shares from a broker: The other option, and perhaps a much more familiar option, is to buy Ford stock in your own accounts, like a brokerage account or IRA. It may require a bit more setup at first, but using an online broker will allow you to buy shares in any publicly traded company. It may also have more features, such as fractional shares and lower fees.
4 steps to investing in Ford
Now let’s go through the steps to buy Ford stock. These steps assume you are using a online broker, which is generally the best path for most investors. You will need to follow these four steps in order to ensure that you own the stock:
1. Open an investment account
The first step is to open an investment account. Online brokers typically have a wide variety of account types, such as taxable brokerage accounts, Individual Retirement Accounts (IRAs), and Health Savings Accounts (HSA). Any of these accounts could be an ideal choice depending on your investment goals. Non-retirement accounts like brokerage accounts have fewer tax advantages than retirement accounts like IRAs. However, you can opt for a brokerage account if you already contribute the most to an IRA.
2. Review SEC Filings
Ford is publicly traded and all of these companies are required to file certain reports with the SEC. These include Form 10-K (Annual Report) and Form 10-Q (quarterly reports). This may not sound very appealing, but reviewing SEC filings is important if you want to invest in just one company.
For example, Ford’s quarterly reports tell us that the company’s revenue grew 50% year-over-year in Q2 2022 and 10% in Q3 2022. Despite the strong increase in revenue, Ford hovered just around the break-even point in terms of net profit. In the third quarter of 2022, for example, its net profit margin was -2.1%. It is important to know the financial health of a company before deciding to invest.
3. Decide how much to invest
The next step is to decide how much to invest. Again, this is an individual that will depend on your wallet and goals. Typically, the content of a company’s annual and quarterly reports will help determine your level of optimism. Another rule of thumb is to limit your individual positions to 5% to 10% of your wallet. So, if you invest in Ford and certain other companies, all of these individual positions should not represent more than 10% or less of your entire portfolio. This is just a rule of thumb, but most investors should limit their individual positions and instead invest primarily in low-cost index funds.
4. Place your order
Once you have decided on the amount to invest, you are ready to place your order. With online brokers, you typically process two types of orders: market orders and limit orders. Market orders are executed as quickly as possible at the next available price. Limit orders allow you to set the highest price you are willing to pay. Thus, the order will only be executed if it can be executed at the price you specify. If the price is higher, the order will not complete.
The essential
Investing in Ford (or any publicly traded company) only requires a few steps. For example, opening an account with an online broker is as easy as placing an order online. However, investing in individual roles isn’t that simple – you also need to understand the inner workings of the business. Still, if you’ve made up your mind to invest in Ford shares, it only takes a few minutes – or less if you already have a brokerage account.
Tips for investing in stocks
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Deciding how to allocate your portfolio isn’t always easy. However, a financial advisor can help you make the right choice. A financial advisor can help you develop a strategy to help you achieve your goals. And finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool connects you with up to three financial advisors who serve your area, and you can interview your advisors at no cost to decide which one is best for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.
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Not sure how much your investments will grow over time? Try SmartAsset for free investment calculator to estimate how much you will have in 10, 15 or 20 years. Whatever your time horizon, it’s important to know where you are.
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