Ford Motor Company (F) is one of the world’s largest automakers 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 auto market, introducing vehicles such as the all-electric F-150 Lightning. Here is the step-by-step process you need to follow if you’re interested in investing in Ford Motor Company. You may want to consider talking to a financial advisor who can help you determine if Ford’s stock will help your financial plan achieve your goals.
Ways to Invest in Ford
Investing in Ford can be a great way to either buy part of a company you love or to find an interesting investment for your portfolio. If you want to invest in Ford, there are two main ways, either buy directly with 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 direct with Ford through a program called Computershare. This method doesn’t require an investment account like a brokerage account. While that might sound like a more convenient way to go, you won’t be able to buy any other company stocks through Computershare. There might also be fees that you won’t encounter with a discount broker.
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Buy Stock from a Broker: The other option, and possibly a much more familiar option, is to buy Ford stock in your own accounts, such as a brokerage account or IRA. This may require slightly more setup in the beginning, but using an online broker will let you buy stock in any publicly traded company. It may also have more features, such as fractional shares and lower fees.
4 Steps for Investing in Ford
Now, let’s review the steps to buy Ford stock. These steps assume you are using an online broker, which is typically the best route for most investors. You’ll need to follow these four steps in order to make sure you own the stock:
1. Open an Investment Account
The first step is to open an investment account. Online brokers generally have a wide variety of account types, such as taxable brokerage accounts, individual retirement accounts (IRAs) and health savings accounts (HSAs). 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 may opt for a brokerage account if you are already contributing the maximum to an IRA.
2. Review SEC Filings
Ford is publicly traded, and all such companies are required to file certain reports with the SEC. These include Form 10-K (annual reports) and Form 10-Q (quarterly reports). It may not sound very appealing, but reviewing SEC filings is important if you want to invest in a single company.
For example, Ford’s quarterly reports tell us that the company’s revenue was up 50% year-over-year in Q2 2022 and 10% in Q3 2022. Despite the big revenue increase, Ford has been hovering right around the break-even mark in terms of net profit. In Q3 2022, for example, its net profit margin was -2.1%. It’s important to know the state of a company’s financial health before deciding to invest.
3. Decide How Much to Invest
The next step is to decide how much to invest. Again, this is very much an individual that will depend on your portfolio and goals. Generally, the contents of a company’s annual and quarterly reports will help determine how bullish you are. Another rule of thumb is to limit your individual positions to 5% to 10% of your portfolio. Thus, if you invest in Ford and some other companies, all those individual positions shouldn’t be more than a maximum of 10% of your entire portfolio. This is just a rule of thumb, but most investors should limit their individual positions and instead invest mostly in low-cost index funds.
4. Place Your Order
Once you have decided how much to invest, you are ready to place your order. With online brokers, you typically deal with two order types: 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 won’t execute unless it can be done at the price you specify. If the price is higher, the order won’t complete.
The Bottom Line
Investing in Ford (or any publicly traded company) requires just a few steps. For example, opening an account with an online broker is as simple as placing an order online. However, investing in individual positions is not as simple – you must also understand the company’s inner workings. Still, if you are set on investing in Ford stock, 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 figure out a strategy to help you reach your goals. And finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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Unsure how much your investments will grow over time? Try SmartAsset’s free investment calculator to estimate how much you will have in 10, 15 or 20 years. Whatever your time horizon might be, it’s important to know where you stand.
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Source: finance.yahoo.com