How to buy Tesla (TSLA) stock

To many consumers, Tesla Inc. is synonymous with electric cars and the broader clean energy movement. On Wall Street, Tesla’s stock is often among the most actively traded stocks, with millions of shares changing hands each day. The stock is listed on the Nasdaq stock exchange under the ticker: TSLA.

How to buy Tesla stock with a brokerage account

If you would like to buy Tesla stocks, you need to go through a brokerage. Opening a brokerage account is your key to buying and selling securities, like stocks, mutual funds and exchange-traded funds (ETFs). An online broker is the cheapest and most popular option for beginner investors with brokerage usually starting at $10 - $20. For investors who want advice or to deal in large amounts of shares, a full service broker could be the way to go.

Before buying Tesla stock—or any stock—it’s wise to do some research into the company’s financials, performance and future outlook. The easiest place to get started is through a company’s annual reports (Form 10-K) and quarterly reports (Form 10-Q). You can find these on Tesla’s investor relations site or by searching the Securities and Exchange Commission’s (SEC) database.

Now is the time to decide how much you want to risk on those Tesla (NASDAQ: TSLA). If you are buying Tesla shares, you can lower your risk through fractional investing. You can also keep your costs lower by using average down strategies, only increasing your share count during dips so that your portfolio is as cheap as possible.

You may also turn to financial experts for their input. A financial advisor helps you specify your financial goals and then purchases and manages your investments for you, including buying stocks. It is a great investment alternative for newbie investors.

How to Invest in Tesla With Index Funds

One of the basic principles of investing is to spread your risk by diversifying. If you holding shares in just one or a handful of companies' shares, you'll be seriously affected if any suffer a major price decline or collapse. The idea behind this is that if one share does badly, you hope that the other shares you've picked do well to make up for it.

An index fund contains hundreds or thousands of individual stocks and is the “easiest way to diversify your portfolio.” TSLA currently makes up about 1.5% of the S&P 500. If you want an index with even larger TSLA representation, you might consider investing in a Nasdaq index fund, where Tesla accounts for almost 4% of holdings.

Should you invest in Tesla right now?

The demand for EVs right now exceeds the supply. That bodes well for Tesla, which is selling the most EVs right now, with 936.000 cars sold in 2021. Furthermore, the company reported an operating margin of 14.7% for the fourth quarter.

Tesla stock currently trades at a significantly higher price-to-earnings (P/E) ratio compared to legacy and even the top technology stocks. Tesla’s stock price jumped on the development. But the reality is Tesla’s potential success may be already baked into the stock price you’re paying today. So the question for potential investors isn’t how Testla has performed recently — it’s what might come next and whether the stock is a good fit for your portfolio.

As a retail investor, you’re up against institutional investors who have the resources of an army to uncover the kind of things that move stock prices long before you do. That’s why it’s best to avoid investing in any company solely based on past performance or its current price. Instead, you’ll want to pore over Testla’s financial statements, revenue, earnings, projected performance and dozens of other variables to determine whether Testa is a sound investment.

Is Tesla stock a buy or sell today?

Tesla stock's premium valuation is in large part due to its higher revenue growth and higher margins compared to other automakers. However, beyond that, Tesla needs to show that it can sustain the high growth at such high margins.

The 28 analysts offering 12-month price forecasts for Tesla Inc have a median target of $1,068.40, with a high estimate of $1,580.00 and a low estimate of $313.00. The median estimate represents a +27.16% increase from the last price of $840.23.

In the stock market, timing is critical. If you are risk averse, you may not want to jump in right now.