Investing In Amazon Stock: What You Need To Know

In the ever-dynamic economy of today, there are several ways of generating net income. Among others, stock trading is one of the ways considered highly for net income. If you’re a stock trader or you aspire to be one, the option you should know about is Amazon stock. 

 

Amazon.com Inc. is one of the most popular and amongst the global leader blue-chip companies in the world that offers individual stocks for traders to trade. The company was founded by Jeff Bezos in 1994. Amazon Company offers a wide range of products and services in different sectors of the economy on a global scale. With the stepping down of Jeff Bezos and the taking over of Andy Jassy as the new CEO of the company, Amazon stocks gained further momentum. In the last few years, the share price and revenue accrued to the company have left so many investors wondering about the management acumen of Jeff Bezos.

 

Read on to find out what you need to know before opening a stock trading account. But before we dive deeper, let’s quickly walk you through the potential benefits of purchasing Amzn stock and the share price.

1. Amazon Strong Background 

Despite some weakness attributed to the market, Amazon still boasts of a market-cap of around $1 trillion. In fact, the stock price of Amazon gained more than 7% in the recent trading days. Similarly, earnings per share as reported is also strong, surpassing the 60% price range. If you take a look at the industry, amongst many, only a few blue-chip companies match this impressive past performance for investors. 

2. Amazon’s Cloud and Retail Businesses Still Remain Young 

It is a known fact that Amazon’s cloud and many businesses like Amazon web services have been around for a while now, they’re still early in their growth stage. Amazon web services, cloud business, AWS or other businesses are not new to many of us; same with the online retail business, these two businesses are projected to grow even as the global village continues to experience challenges.  

3. Amazon’s Customers Are Loyal 

When it comes to online retailing, Amazon company is considered highly. Most online shoppers usually start their product search on Amazon. The reputation that Amazon has created has made the company experienced customer loyalty. We all know that customer loyalty is an ingredient or a sign that a business is bound to continue to grow. 

4. Free One-day Delivery 

The results of Amazon company’s fourth-quarter earnings for 2020 showed that its free one-day delivery has caused a positive market reaction. By the end of 2020, around 50% of all the products retailed on Amazon company were eligible for the one-day delivery service. This is one big leap that stands the company out from the crowd.

Before you fund your trading account, there are a few things you should put into perspective. Let’s walk you through two things to keep in mind if you invest in Amazon company or other stocks. 

1. How Much Money Should You Invest 

This point is very important. Remember, Amazon company is one of the most performing options on the market, plus the fact that it is considered amongst long-term investment options. More so, financial experts have consistently warned investors from investing any money they would need in the next 5 years, as an investment can be risky. 

2. Does The Stock Fit Into Your Portfolio? 

Clearly, this is a question you should answer before considering Amazon stock investment. With the high stock price of Amazon, you should consider how you will diversify your investment portfolio to have it function properly. Remember, investing or buying only a single stock can be a very risky investment, particularly when the company experiences rough times.

As a beginner, you only need three things before you start Amazon stock investment or to sell shares. First, you need a trading device. A trading device can be your smartphone, personal computer, or laptop.

 

Second, you also need a strong internet connection to connect with your broker. If your internet connection is not strong enough, you may miss out on important updates when your broker shares important tips.

 

Lastly, you need educational materials to keep you abreast with the nitty-gritty of the industry, if you don’t have a financial advisor. The market is very vast. You can’t learn everything in a single day. For this reason, you need trading resources so that you can continue to read or study to improve your trading experience. These resources are for educational purposes.

Trading Amazon CFDs

Contract for difference, CFD, is a trading concept where you speculate the rise and fall of an asset without directly owning the underlying asset in question. As a retail trader, you can trade Amazon CFDs without owning Amazon stocks. The major difference between trading Amazon CFDs and the traditional way of trading Amazon stocks is that in the former, you don't own the underlying asset. 

However, once Amazon distributes dividends to all its shareholders, you will also benefit from the dividend and other corporate actions. CFD traders also trade long or short, set limits and stop losses. They also apply trading strategies based on their individual preferences.

Primefin is amongst the top stock brokers in the world offering different financial instruments at competitive rates. If you’re in South Africa or a South African citizen and you’re looking for a quality broker to purchase/buy or sell Amazon stock, look at Primefin. If you’re wondering why you should use Primefin to purchase Amazon stocks, the following points should help:

 

• Regulated Broker: Primefin is a regulated broker or investment platform that has helped thousands of investors to facilitate their stock trades. The regulation status means that your investment is in safe hands and enables you to purchase and sell much easier. 

• Maximum Security: The Primefin trading or investment platform is highly secure. We use cutting-edge technology to secure our trading platform. When you make a deposit, your funds are safe in our custody. More so, your personal data or information won’t be divulged to third-party merchants for affiliate purposes. 

• Education Resources: If you’re a newbie, you need an in-debt knowledge of the trading to make any headway. Thankfully, at Primefin, we have a wide range of educational resources so that help you learn the nitty-gritty of the market, and also will help to understand how to implement the trading strategies. 

• A Wide Range Of Trading Assets: Primefin offers a wide range of financial instruments for your trading preferences and investment. If you want to add other financial instruments into your portfolio, it is possible here. Among others, our website offers assets like cryptocurrencies, commodities, pure metal, and oil. 

• Ease Of Withdrawal/Deposit: You don’t want a broker that will take forever to process your deposit/withdrawal, as it's a common tactic by many companies. At Primefin, our website processes all deposits and withdrawals almost instantly. For deposits, the balance will immediately appear in your trading account. For withdrawals, once you submit a withdrawal request, you will receive payments in the account provided. Please note that all these processes very swift. And there are also banking options available. But through banking options, the time is slightly longer for transactions.

If you have made up your mind to buy stock with us, our process is simple and straightforward. Here is how to go about it:

 

• Visit the official website of Primefin using your smartphone or personal computer
• Click the investment account creation button and fill the account opening form with your details. Upload all the documents that are required so that you will pass the KYC process.
• You will receive an email confirming that your account has been created.
• Navigate to your dashboard and click on the deposit button and choose a payment method that you’re most comfortable with. Enter the amount you want to fund your account with and click on “done” to proceed to the next stage.
• Locate Amazon stock (AMZN) from the list of stocks available on your dashboard.
• Open a buy order, create a limit order, and place your trade.

With a wide variety of blue-chip companies in the industry, it can be overwhelming for newbies to decide whether or not Amazon’s stock is right for them or the only option. While the company’s stock comes with a significant growth rate and impressive past performance, you still need to check out other companies in the blue-chip status category. Companies like Walmart and Microsoft are also great in terms of offering competitive free stock. Plus, similar to Amazon, these two companies are also into either cloud services, cloud computing services, retail, or e-commerce.

Keep in mind that, though for some time now, Amazon has not suffered any setback, but it is also susceptible to risk and market factors that may cause you to lose your capital when you buy amazon stock. In the e-commerce field, different factors like climate, competition, and the economy have the potential to affect a stock’s performance. Therefore, before you buy amazon stock, ensure you holistically analyze the company’s performance and market value for future results.

That would be it. Investing in technology companies during the pandemic era can be looked at. Technology companies like e-commerce giant Amazon and have surged in their share or stock price due to the global lockdown occasioned by a coronavirus. Even before the pandemic, Amazon company stock price has been doing well, only that the pandemic made more people start shopping online.

 

The general rule about investing is to do your due diligence and not consider any of this as a piece of investment advice, before opening a trading account with a broker. If you are set to invest in Amazon like a retail giant, the next step is to research the broker you’d be using to access the stock market. There are so many factors to look out for when looking to choose an online broker. Among others, you should pay attention to things like the broker’s regulation status, the ease of deposit and withdrawal, the broker’s asset classes, as well as their trading platforms. If you can tick the box in these areas, you’d be one step away from buying Amazon stock in a comfortable way.

 

As you add Amazon to your investment portfolio, you should also consider diversifying your portfolio by adding other asset classes like cryptocurrencies, pure metals, commodities, indices, oil, and mutual funds. When it comes to trading, do not just jump on the bandwagon without learning more about the financial markets.

 

Your best bet could be to use a demo account to test the waters before depositing funds into your brokerage account to trade in a live environment. At Primefin, there is support for a demo account. The demo account is user-friendly and designed with newbies in mind. Remember to have risk management measures in place so that you can handle any situation.

Yes, anyone can invest money in Amazon. But, you need to sign up with a broker to get started. The potential advantage of investing through a broker is that you will have the opportunity to buy fractional Amazon shares in case you can’t afford the full Amazon shares.

Investing in Amazon is very simple and straightforward. Here is what you need to do:

 

• Choose a regulated broker. But before you settle for any stock broker, ensure your carry out your due diligence and pay attention to your strategies. What we mean is, check the broker’s regulation status, ease of deposit/withdrawal, tradable assets, and customer service.
• Open a trading account with the selected online brokerage.
• Fund your trading account with the minimum amount requested by the broker.
• Locate Amazon stock with the ticker – AMZN.
• Open a buy shares order and create a limit order or market order, then place your trade via market order or limit order.
• That’s all.

How much would I have if I invested $1000 in Amazon? 

If your initial investment was $1,000 a few years ago when the price was barely $200, your profit would have skyrocketed as of today’s price. For instance, on April 4, 2020, those who invested $1,000 are now worth around $1,690 as future performance. However, you may consider taking the opinion of your financial advisor before investments.

The process of investing little or big money in Amazon is basically the same. However, while the stock market allows investors or traders to invest as little as $50, it is usually higher to start investments in Amazon with between $500 and $1,000. As you invest little money, remember that you have to set aside what known as commissions and fees that are usually charged by stock brokers from the investor's account.