How to Buy Netflix Stock (NFLX)

Introduction

Netflix is currently a significant player in the video streaming industry, with over 238 million global subscribers. Since the company started trading its stock publicly, it has been remarkably successful. Its operating margin was 18% in 2022 and hit 22.4% in mid-2023. The company’s success translates into a rewarding opportunity for potential investors. This article will serve as a guide and show you how to buy Netflix stock.

Highlights and Key Takeaways

• Netflix stock has recorded numerous successes over the years because of increased subscriptions and prices, with prospects to do more.

• Increased competition from other fast-rising video streaming platforms might affect the prospects of Netflix stock.

• To buy Netflix stock, you have to register with a brokerage, fund your account, and purchase stock.

• Monitoring your Netflix stock is as important as choosing the right stock to invest in.

Understanding Netflix as an Investment

Before investing in Netflix, you must understand how investment in the company’s stock works. This includes having information about the company’s background, financial standing and statements, and investment opportunities are crucial before making a decision concentrating on elements like market trends, competitive position, financial health, and future potential.  You can learn more about Netflix stock by;

• Conducting in-depth research: This will enable you to obtain detailed information about the company so you can decide if you would like to go ahead with your investment. It will also help you understand how to buy Netflix stock.

• Taking advice from a broker.

Why Invest in Netflix?

Like most other large-cap stocks, Netflix stock possesses features such as a high potential for stability, an established business model, sustainable management capabilities, and market information availability.

Other reasons you may want to consider investing in Netflix stock are the long-term benefits of its current efforts toward exploring multiple sources of income. Also, Netflix has since introduced an advertising-based revenue model.

The video streaming platform is not only witnessing subscription growth but also increasing prices. With more subscribers, the platform earns more. You should ensure that any company you intend to invest in has grown predictably over the previous three years; if not, you may end up losing money.

Although the primary market for Netflix is the U.S., since 2016, the platform has undertaken an ambitious global expansion campaign by entering over 130 new countries and providing its content in multiple languages. This has expanded its market. 

Risks Associated With Investing in Netflix

Although Netflix stock has been a great investment for over a decade, this does not guarantee future results. The volatile nature of the stock market could make or mar an investment in Netflix stocks.

In the past few years, there has been an increase in competing streaming platforms,  such as  Disney+, Amazon Prime, Discovery’s Max (formerly HBO Max), Paramount Prime, and many others. 

While fewer people may become Netflix customers as a result of increased competition, this does not always mean that Netflix will make less money. Subscriptions and profit have a more complex relationship when you take into account things like cost, content investments, and international growth.

How To Buy Netflix Stock

Buying Netflix stock is as easy as ABC if you follow the guide detailed in this article. You can decide to either;

• Buy the stock through a physical broker or

• An online brokerage platform. This is usually preferable.

Choosing a Brokerage

To buy Netflix stock or any other stock, you need a brokerage. Brokers act as an intermediary between you as the investor and the stock market, helping you execute the buying and selling of stocks.

When choosing a brokerage, look out for the following: platforms that are user-friendly and easily accessible and platforms that offer commission-free stock trading. Furthermore, ensure that the platform has good security features and is regulated by relevant authorities such as the Financial Industry Regulatory Authority (FINRA). 

Only brokers with positive reviews and good track records should be considered. Finally, choose platforms with top-notch customer service to make it simple to find pertinent information and get clarification when needed. Remember that buying stocks can be made easier or harder, so it’s important to consider the features and costs of each platform.

Placing a Stock Order

Once you’ve chosen a brokerage, you can place your order. When buying Netflix stocks, you’ll have the option to choose whether you want to place the order as a limit order or a market order. 

Market orders, when placed, are processed immediately at the current price. Limit orders, on the other hand, are only processed when the stock reaches a price you set. Limit orders can be a good choice if you expect that the Netflix stock price will drop soon.

Monitoring Your Investment

Monitoring your investment in Netflix is essential for maximizing your potential returns and managing risks effectively. Here are some key reasons why monitoring is crucial:

• Track Performance: Regularly monitoring your Netflix stock allows you to track its performance over time. You can assess whether the stock is meeting your investment goals and expectations.

• Identify Risks: By monitoring your investment, you can stay informed about industry trends, competitor activities, and any potential risks that may impact Netflix’s stock. This helps you make proactive decisions to mitigate risks and protect your investment.

• Determine Selling Points: Monitoring enables you to identify the right time to sell your Netflix stock. You can set specific targets or thresholds for selling based on your investment strategy, market conditions, and Netflix’s performance. This ensures that you make informed decisions to capitalize on profits or minimize losses.

• Stay Informed: Monitoring your investment keeps you updated on news, announcements, and financial reports related to Netflix. This knowledge helps you make informed decisions and react promptly to any significant changes in the company or market.

• Adjust Your Portfolio: By monitoring your Netflix stock, you can assess its contribution to your overall investment portfolio. You can then make necessary adjustments to maintain a well-diversified portfolio and balance your risk exposure effectively.

Remember, actively monitoring your investment in Netflix is an ongoing process. Stay engaged, stay informed, and stay proactive to make the most out of your investment.

Understanding Stock Performance

To monitor your Netflix stock investment, you have to stay up to date with the latest news from the company. It’s critical to keep up with company news and evaluate quarterly results if you want to manage your investment in Netflix stock. You can also subscribe to relevant newsletters that send daily and weekly updates on the stock market. 

Stock charts are a chaotic show of lines, colors, numbers, and acronyms. When considered at first glance, they may seem difficult to understand. However, once you can master how the chart works, it will help monitor your investment and trends in the market.

Understanding the structure of the charts is one of the most crucial things to do. In this manner, you’ll be aware of any significant structural breaks.

On the stock charts, look at the top to find a symbol, which is a short alphabetic representation of the company’s name. For Netflix, it is NFLX. You can chart according to the periodic performance of the stock; it could be daily, weekly, monthly, or yearly.

The stock chart is usually divided into the upper and lower sections. The upper part monitors the changes in stock price over a period. 

The prices are often shown in different colors. The marker may be black if the stock closed up on a particular day. Whereas the price at which the stock closed may be marked in red.

At the bottom of the chart, you will find the volume of Netflix stock traded. This will help you determine the investment sentiments of the stock. 

When To Sell Your Stock

Knowing when to sell your stocks can significantly impact your returns on investment. Here are some additional factors to consider:

• Sell your stocks when they reach your target price. Set realistic price targets based on thorough research and stick to them.

• Consider selling if your stock experiences abnormal price increases that are outside the company’s performance or market trends.

• Significant declines in the company’s fundamentals of earnings should prompt you to consider selling your stocks.

• If the company’s management team, strategy, or industry landscape changes negatively, it might be time to sell your shares.

• Selling your stocks to cut losses may be necessary if the company faces significant financial challenges, legal issues, or scandals.

• Diversification: You can reduce risk in your investing portfolio by diversifying it. Rather than putting a lot of money into one stock, think about diversifying your investments.

• Keep Up: To stay aware of any developments that can influence your decision to hold or sell, keep a regular eye on news and updates about your investments.

• Market Conditions: When deciding whether to sell, consider the state of the market as a whole. Stock prices can be influenced by market trends and economic variables.

• Tax Implications: Take into account these aspects while making your decision and be mindful of any possible tax repercussions from selling stocks.

Remember, deciding to sell your stocks requires careful thought and research. Always keep in mind your investment goals and seek professional advice if necessary.

How To Invest in Netflix with Funds

Instead of buying individual Netflix shares, you can decide to invest in index funds (ETFs) that own Netflix shares.

Index funds are mutual funds that track and replicate how a particular market index performs. They are structured in such a way that enables them to mimic the elements of a stock market index.

Index funds are top-rated among investors who wish to invest in diverse stocks with low management fees and minimal research.

Some of the reasons to consider index funds include;

• They have lower transaction costs and taxes because they are passively managed.

• They have lower management fees.

• These are perfect for long-term investing, such as retirement funds, because they mimic the performance of financial market indices, such as the S&P 500.

• You don’t need to bother about examining the charts or the company because your investments are automated.

Conclusion

The growth of Netflix subscribers and the increased competition in the video-streaming industry make the company a fantastic choice for investments. However, it is pertinent to understand that present situations in the stock market do not guarantee future results. You have to conduct due research and constantly monitor the performance of Netflix stocks. This will help you make good investment decisions. Another important thing is to use a broker under the supervision of financial organizations so your funds are not misappropriated.

FAQ

How Can I Buy Netflix Stock?

To buy Netflix’s stock, you have to create an account with a brokerage platform, fund the account, and place your order.

Should I Buy Netflix Stock?

The platform’s continuous subscription growth and global expansion are some of the reasons you should buy its stock.

Does Netflix Pay Dividends?

No. Netflix does not pay dividends; instead, it reinvests profits for expansion. You should decide if you are comfortable with this before you invest in the company. 

Are Netflix Shares a Good Buy?

Given Netflix’s stock position and its prospect to grow bigger, investing in Netflix shares might be a good buy. However, you should never forget to do your research and know your risk tolerance. 

What is The Best Stock to Buy Right Now? 

You have to conduct due research to verify which stock is best for you to buy. This depends on the funds you have at your disposal and also your risk tolerance. Ensure that the company you choose to invest in has a growth potential.