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Whether you believe in the future of electric vehicles (EVs) or simply want to diversify your portfolio by investing in foreign companies, Chinese powerhouse Nio could be a great choice.
Nio was founded in 2014 and is often called the Tesla of China. As a result, its stock price has skyrocketed since its IPO in the United States. Shares of Nio have risen more than 700% in the past three years, from $1.56 in October 2019 to over $12 at the time of this writing.
If that kind of performance makes you want to give your portfolio a boost, here’s what you need to know to buy Nio stock.
How to buy Nio (NIO) shares
1. Research your investment options
Before buying Nio stock or any other stock, you should do your due diligence. This means studying the company to make sure you have confidence in its strategy and performance.
Valuable sources of information include company filings with the Securities and Exchange Commission (SEC), including annual and quarterly reports. Nio also publishes these documents on its investor relations site.
You should also look for analyst reports on Nio and other companies. Third-party companies like the morning star often provide stock analysis, and Forbes Advisor experts provide insights and updates on company performance.
You can use publicly available information, expert advice and your own judgment to make informed decisions about investing in Nio.
2. Choose an investment platform
If you don’t already have one, you need an account on an investment platform to buy NIO shares. A taxable investment account lets you buy a wide range of assets beyond stocks, like exchange-traded funds (ETFs) and mutual funds.
Brokerage accounts can have account minimums and other fees, so be sure to consider your options carefully before deciding which account is right for you.
Brokerage accounts are available from online brokers, investment apps, or even full-service brokers. If you decide to go with a full-service option, you’ll have access to a fuller range of services, like estate and retirement planning, but you’ll likely pay the most in fees. Online brokers and investment apps can also offer automated management.
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3. Select the right investment account type
Once you have identified the right investment platform, you need to open a brokerage account, which allows you to buy and sell securities, including stocks and mutual funds. Depending on the platform you choose, you may also have access to research and education tools and several investment account options.
If you’re investing for your retirement, open an Individual Retirement Account (IRA). But if you are buying NIO for short or medium term goals, choosing a taxable brokerage account is your best option. Unlike IRAs, which have restrictions on when you can withdraw money from the account, taxable brokerage accounts have no age restrictions or early withdrawal penalties.
4. Think about how much to invest in NIO
For investors looking to take advantage of the booming electric vehicle market, Nio might look like a bargain. Tesla, one of the biggest names in electric vehicles, was trading at over $200 per share in October 2022. At around $12, Nio is a more affordable option, and even novice investors can probably afford shares. whole.
However, it is not recommended to put all your money in one stock or in one industry. You want to build a diversified portfolio, so consider how Nio will fit into your overall investment strategy.
Stock prices can fluctuate widely, so only invest money you don’t need to cover short-term bills or necessary expenses.
5. Placing an order
Now that you’ve done your homework and know how much you want to invest, you can place your first Nio stock order.
To buy shares, go to the trading platform of your brokerage account and enter the stock symbol and the number of shares you wish to buy. Nio’s American Depositary Shares (ADS) trade on the New York Stock Exchange (NYSE) under the ticker symbol (NIO).
Brokers usually allow you to choose the type of order you want to place. With a market order, you can buy shares at the current price. With limit orders, your order is only processed if Nio’s price reaches a certain point or below.
Stocks on the NYSE are traded Monday through Friday from 9:30 a.m. to 4:00 p.m. (EST). After-hours trading is available through some online brokers, so you may be able to buy and sell Nio shares after the market closes.
6. Monitor Nio’s Performance
When buying stocks, it is wise to examine your portfolio and its performance. Looking at an annualized percentage return can help you compare a stock’s performance to your overall portfolio and the performance of the company’s competitors.
Industry benchmarks, such as the S&P index of electric vehicles in the United States and Chinacan be useful to analyze Nio’s situation in relation to the electric vehicle market.
How to sell NIO shares
Selling Nio shares is simple. Enter the brokerage account trading platform, enter the number of shares you want to sell and decide whether you want to sell at the current price or set a target sale price for the future.
Remember that if you sell for a profit, you will have to pay capital gains tax. The tax rate may vary depending on how long you hold the shares. It may therefore be wise to meet with a tax advisor before making any changes to your portfolio.
How to invest in NIO with index funds
When deciding how to invest your money, diversification is the name of the game. The stock market can be volatile and investing in a range of industries and companies can help lower your level of risk.
Index funds, which aim to replicate the performance of a benchmark, can be an easy way to diversify your portfolio. Fortunately, about 80 exchange-traded funds (ETFs) hold NIO shares. For example, you can invest in the Vanguard FTSE Emerging Markets ETF (VWO) or the KraneShares MSCI China Clean Technology Index ETF (KGRN) to invest in Nio and other companies at once.