How to Buy Ford (F) Stock – Forbes Advisor
Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.
One of the world’s largest automakers, the Ford Motor Company has become an American institution with iconic vehicles like the Mustang and F-150 since its incorporation in 1903.
The question now is whether Ford can provide investors with reliable returns in the years to come. Recent history has been positive: Ford’s average annual return has risen nearly 28% over the past three years, compared to 17% for the S&P 500 over the same period. But 2022 has proven to be a tougher road to follow, with a 17% decline since the start of the year.
The Shelby GT500 goes from zero to 60 in 3.3 seconds; only a few minutes faster than the time it will take you to buy or sell Ford stock after reading this guide.
How to Buy Ford Stock (F)
1. Find a broker
Start by opening a brokerage account. There are many different brokers out there, so look for one with low account minimums – some let you open an account with as little as $1 – and low fees. Check out the best Forbes Advisor online brokers and investment app picks to get you started.
Featured Partner Offers
SoFi Automated Investing
SoFi Automated Investing
2. Choose an account
After opening your brokerage account, you will likely have several account types to choose from. The account you select depends on your long-term needs.
- General financial objectives: The easiest way to buy a stock is through a taxable brokerage account. You’ll have to pay capital gains tax if you eventually sell at a profit – the amount depends on how long you’ve held the stock – but there are few restrictions on when and how you can sell.
- Retirement planning: Most brokers offer traditional Individual Retirement Accounts (IRAs), Roth IRAs, and SEP IRAs. These are tax-advantaged accounts, so you may be able to deduct your contributions or enjoy your growing earnings tax-free. However, there is usually a penalty if you withdraw money from the account before you reach age 59.5.
3. Decide how much to invest
Betting on a single stock, even one as established as Ford, carries big risks. That’s why Forbes Advisor believes you should invest the lion’s share of your portfolio in low-cost, diversified index funds. If you are interested in buying Ford stock, consider the following:
- Current finances: When you invest in a business, you want to make sure the business is financially sound. Ford is publicly traded, so it is required to file financial statements with the United States Securities and Exchange Commission (SEC). You can view Ford’s annual reports (Form 10-K), quarterly statements (Form 10-Q) and other filings on its Investor Relations page. These documents can be invaluable; for example, you can see that Ford sold far fewer vehicles in 2020 than in 2019 or 2018 due to the economic effects of the COVID-19 pandemic. In 2021, the company – like many other automakers – had semiconductor shortage issues that impacted its production.
- Future plans: The economic landscape is constantly changing and you want to invest in companies that have sustainable plans for the future. It’s a good idea to review a company’s shareholder presentations to see what their plans are and whether you agree with the direction the company is taking. Ford has focused on ramping up its electric vehicle (EV) business, while retaining its popular traditional cars and trucks, to compete in the burgeoning EV market.
- Stock price: Although some brokerage accounts allow you to buy fractional shares or individual slices of shares, not all do so, so you may need to invest enough money to buy whole shares. As of March 23, Ford’s stock price was $16.68. Excluding trading costs, that means investing $1,000 would buy you almost 60 whole shares.
- Existing portfolio: Investing in a single company is not something that financial advisors recommend because there is too much risk of losing money if the company underperforms. Instead, experts recommend building a diversified portfolio by investing in multiple companies across multiple industries. When deciding how much Ford stock to buy, look at the holdings in your portfolio and see how Ford complements it.
4. Place your order form
To buy Ford shares, go to the trading platform in your brokerage account and enter the Ford stock symbol (F) and the number of shares you wish to buy. If the broker offers fractional shares, you can enter the dollar amount you want to invest instead.
When placing an order, you can usually designate an order type. The most common variations are market orders and limit orders. Market orders are processed immediately at current prices during trading hours, while limit orders are only processed when the stock reaches a price you designate and makes sense if you believe the price of the stock will drop soon.
Ford is listed on the New York Stock Exchange (NYSE). NYSE trading hours are Monday through Friday, 9:30 a.m. to 4:00 p.m. ET. However, some brokers offer extended trading hours.
5. Monitor the performance of your investment
To monitor Ford’s performance, consider comparing its returns to those of a related index, such as the S&P 500 Index, which tracks the performance of the top 500 companies in the United States.
Use the MSCI ACWI Automobiles and Components Index to compare Ford to a wide range of its peers. This index tracks the performance of large and mid-cap stocks in several countries, and Ford is its third-largest holding.
How to Sell Ford Stock
When it’s time to sell your shares, go to your brokerage’s trading platform and enter the number of shares or dollar amount you want to sell.
If you only want to sell your Ford shares after the company’s shares have reached a certain price, you can usually set an order for that price.
It may be a good idea to consult a tax professional, as selling stocks at a profit can result in capital gains taxes, while selling at a loss has its own advantages.
Other ways to invest in Ford
Ford has been around for over a century, but investing in just one company is always risky.
If you want to invest in Ford but want to reduce your risk, consider investing in index funds or exchange-traded funds (ETFs). These funds allow you to diversify your portfolio without having to do a lot of homework yourself, giving you exposure to a wide range of companies.
Many index funds and ETFs have exposure to Ford. In fact, there are around 200 ETFs that have Ford as one of their holdings. For a broad index fund with exposure to Ford, you might consider a fund like the SPDR S&P 500 ETF Trust (SPY). If you’re looking for a fund specific to the automotive market, look for a fund like iShares Self-Driving EV and Tech ETF (IDRV). But watch out for the fees.
If you’re not sure what type of investment is best for you, consult an investment advisor to review your options.