Nike is a well-known multinational company that offers sporting goods and athletic products. The company was founded in 1964 under the name Blue Ribbon Sports, which launched the Nike brand shoe in 1972. In 1978, the company’s founders renamed it Nike. The famous swoosh continues to be a household name today.
Nike stock has been a reliable performer for many investors. If you’re interested in investing in Nike yourself, continue reading to discover everything you need to know about buying Nike stock, from conducting research to choosing a strategy and where to buy shares.
Table of Contents
1. Research Nike Stock
Nike is a well-known company in the public eye, but that doesn’t necessarily translate to good stock performance.
Before buying any kind of stock, it’s important to look at the company’s performance history in the stock market as well as overall. Information on Nike’s background, such as their management, annual revenue, and net earnings will help you gain a better understanding of how they typically perform in the stock market. Pay careful attention to any historical data and any patterns due to things like seasonality.
In Nike’s case, it’s also a good idea to research who their marketing partners are. Brands like this often sponsor celebrities or pro athletes. The performance and public image of these marketing partners may cause spikes or drops in the value of the stock.
2. Determine Your Investing Strategy for Nike Stock
It’s also important to establish goals with your purchase of Nike stock. You should have a clear idea about what you hope to get out of your investment. Are your financial goals short-term or long-term? If they’re short-term, an investment in Nike may not be the best option.
Individual stocks like this are a risky form of investment, so it’s important to approach them with a long-term strategy. Generally, individual stocks should only account for a small portion of your investment portfolio. While Nike has generally proven itself to be a successful company, it’s not necessarily the right investment for everyone.
To determine if investing in Nike is right for your portfolio, understand that Nike is a growth company, meaning it focuses on innovation and brand diversification — does that align with your financial strategy? Can you handle the consistent analysis required of a growing company? With careful research, you’ll be able to make an educated decision on whether Nike stock can live up to your expectations.
As with any investment option, many components should weigh into your decision-making process. To decide how many shares to buy, consider the following factors:
- Your investment experience: If you’re new to investing, you may want to start out small. If you have more experience and are comfortable with investments like this, expand on your experience.
- Your budget: The amount of money you have to tie up in investments is a huge determinate of how many Nike shares you buy.
- The risk associated with Nike stock: Currently, Nike’s risk factor is 9, which means relatively low risk. That may change at any minute though — this is where careful, diligent research comes into play.
- Your existing portfolio: A diverse portfolio allows you to spread out your investments and ultimately protect yourself in the event that one of your stocks performs poorly. It’s important to figure out how much Nike stock you can buy while maintaining a diverse stock portfolio.
You will also need to figure out if you want to pay the market price — what it sells for in the open market — for Nike stock, or if you want to hold out for a lower price. Nike’s market price changes daily, so it’s important to keep a pulse on it depending on what you want to spend.
If you’re fine with paying market price, you can use a market order, which allows you to buy or sell a stock immediately. Note that the last traded price is not necessarily the price at which a market order will be executed. If you want to wait for prices to fall lower, you will need to buy stock through a limit order. With limit orders, you set a limit price and when Nike stock falls to that amount or lower, your order will be executed.
Once all of those decisions are out of the way, it’s time to execute your Nike investment strategy. Below, we’ll explain three ways you can buy Nike stock.
Many people choose to buy and sell stocks online through brokers. A brokerage account can easily be set up through firms like Charles Schwab, but you could also use sites like E-Trade or Ameritrade. Most firms have their own online portals, so if you prefer one firm over another, check to see if they offer online trading. Online trading sites commonly charge a fee for transactions.
Financial Advisor or Broker
If you want someone to handle your investments for you, a financial advisor or broker can help. Simply let your broker know how much Nike stock you want to purchase, then they’ll buy on your behalf. An advisor is also able to advise you on how much stock to purchase. Note that you’ll have to pay a commission when using this method.
Direct Stock Purchase Plan (DSPP)
This program enables you to purchase stock directly from Nike without help from a broker. It’s an excellent option for new investors without a ton of money looking for something long term, as there are fewer fees associated with buying and selling stock via DSPP. Not all companies offer DSPPs, but Nike does. You’ll need an account with ComputerShare and a minimum investment of $500.
While you can’t predict what will happen with any type of stock, you can conduct research to make educated decisions. Research Nike and create an investment strategy that fits your budget and your financial goals.
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