Whether you’re a diehard fan of the newest program or a cinephile, there’s no disputing that Netflix has transformed the way we watch television.
Netflix now has more than 222 million paid subscribers in 190 countries. NFLX’s stock price has soared since its first public offering (IPO) in 2002. Consider the following: In January 2010, Netflix had a market valuation of around $3 billion, compared to $150 billion.
A Guide to Netflix Investment (NFLX)
1. Select a broker
To trade in Netflix or any other stock, you’ll need a brokerage account. In the stock market, brokers serve as intermediaries for both you and the market, purchasing and selling shares on your behalf. You may utilize a broker to invest for long-term objectives such as retirement or benefit from short-term opportunities.
There are complete agents and Robo-advisors. Generally, look for a broker with minimal costs and low investment minimums so you may start investing right away. You can begin your search with our recommendations for the most acceptable investing applications and online brokers.
2. Create a User Account
Depending on the brokerage firm you choose, you may have various account types. Brokers may provide IRAs, 529 college savings programs, and taxable brokerage accounts.
- Accounts de retraite. If you start an individual retirement account (IRA), you may take advantage of tax benefits while saving for retirement. However, IRAs have a significant drawback: If you withdraw funds before reaching 59 12, you will be subject to a 10% penalty cost and income taxes.
- Taxable accounts. While tax-deferred brokerage accounts do not provide tax benefits, they have a few perks. You may withdraw cash at any time and for any cause, providing you with more flexibility when accessing the profits of your investment.
3. Conduct Netflix research
No Third Party – PaydayNow suggets, Before investing in Netflix or any other company, you should do due diligence. If you’re going to acquire shares, you should understand the company’s fundamentals and confirm that it has a viable business strategy.
Like all other publicly listed firms, Netflix is obliged to submit financial statements to the Securities and Exchange Commission in the United States (SEC). On its investor relations website, you may access the company’s annual reports and quarterly financial statements.
When examining those papers, keep the following points in mind to assist you in determining the amount of money to invest:
- Volatility: Netflix’s stock price has changed significantly over the last several years. Its price reached $682 in 2021. As of March 2022, it has decreased to around $330. Netflix advises in its annual report that its pricing would continue to fluctuate owing to circumstances outside its control.
- NFLX is not as pricey per share as other high-flying technology firms. While some brokers enable investors to acquire fractional shares—a proportionate slice of a single stock—others require clients to deposit the necessary amount to purchase a complete claim. If that is the case, using a method such as dollar-cost averaging may be more complicated since you will need to accumulate a significant amount of money before purchasing a share.
- Netflix was the only streaming video provider available but now faces fierce competition in the streaming industry. NBC launched Peacock, and Disney did the same with its Marvel films and series when it created Disney+. Competitors like these are pushing the corporation to invest more in unique content production.
4. Submit an Order
If you opt to acquire Netflix stock, go to your preferred trading platform and input Netflix’s ticker symbol—NFLX—along with the number of shares you desire to purchase. If you’re using a fractional share investing software, you may input the dollar amount you’d want to invest in Netflix instead.
Generally, you may place the order as a limit or market order. When made during regular trading hours, market orders are promptly executed at the current price. By contrast, limit orders are executed only when the stock hits your chosen price and might be a smart option if you anticipate the price will fall soon.
Netflix is traded on the Nasdaq stock market, the world’s second-biggest. Monday through Friday, the Nasdaq trades between 9:30 a.m. and 4:00 p.m. ET. The Nasdaq does provide pre-market and after-hours trading in addition to its regular trading hours.
5. Keep an eye on NFLX’s performance
Even if you want to retain your Netflix stock for the long term, it’s good to do frequent reviews of your investment’s performance. You may compare it to the performance of a stock market index such as the S&P 500 to see how it compares.
If you have many investment accounts with various brokers, an investing portfolio app may help you manage them all in one location.
6. Develop an Exit Strategy
Whether you intend to hold your Netflix shares for a few years or several decades, the time will come when you must sell.
As with acquiring stock, you may sell your shares by logging onto your broker’s portal and providing the ticker symbol and desired market price. You may sell the stock at its current price or create an order to sell only when it reaches a specified price.
If your investment generates a profit, you may be subject to capital gains taxes; therefore, consult a tax advisor before placing any sell orders.
Additional Methods of Investing in Netflix
Netflix’s performance has been unpredictable throughout the last decade. While it grew at a breakneck pace for many years, its price has dropped by 25% in the previous 12 months.
Given this volatility, you may wish to explore index funds or exchange-traded funds (ETFs) rather than individual equities. These funds invest in hundreds, if not thousands, of firms simultaneously, providing you with a pre-built, diversified portfolio.
As a big firm, several funds may expose you to Netflix. Netflix is a stake in over 250 exchange-traded funds. The Invesco QQQ Trust (QQQ), a fund that monitors the Nasdaq 100, is one of Netflix’s largest shareholders.
If you’re interested in a more specialized fund, consider the Fidelity MSCI Communication Services Index ETF (FCOM) or the Simplify Volt Pop Culture Disruption (VPOP) fund.