It's easy to invest in Alphabet (NASDAQ: GOOGL) shares from Australia thanks to the rise of online share trading platforms.
Read on for our step-by-step guide to buying shares in Google, covering everything from selecting a broker to configuring an order.
Alphabet Inc. was created in 2015 by a restructuring of the Google company and now stands as the parent of Google LLC and its numerous subsidiaries, including Fitbit. Google’s self-titled search engine is the most-visited website on the planet, followed by their online video platform YouTube.
Step 1: Pick an online broker
A broker is a service that allows you to buy and sell shares. If you are buying Alphabet shares (NASDAQ: GOOGL, NASDAQGS: GOOG) from Australia, you will need to set up an account with a broker that trades in US shares. Thankfully there are plenty to choose from, offering various features.
Some of the options your online broker may offer include:
Commission-free trades
When you are making regular trades, the commissions charged for each transaction can really add up.
Commission-free trading, which many online brokers that trade in US shares offer, can make a big difference.
Fractional investing
Investing in a tech giant such as Google can be an expensive undertaking, so the chance to buy just a part of a share can allow you to enjoy the benefits of share ownership without breaking the bank. It is less risky than buying full shares.
Research and reporting
Look for a platform that has a solid research and reporting section that can give you important information about Google, including company overview, price history, recommendations and price forecasts.
Easy-to-use trading platform
If you are starting out in share trading, too much information can be confusing. Look for one that allows you to conduct your trades simply.
Step 2: Send funds to your account
When you have settled on a broker, you will transfer money from your bank account into your brokerage account; this may take a few days to clear if you do not have an account open.
Step 3: Decide how much you want to invest
Alphabet shares are expensive, which is where fractional share investing can be of real benefit. This method allows you to start small — because you can buy a fraction of a share that might otherwise be unable to afford — and build your investment as you wish.
No matter how much you decide to invest, it’s important to only spend as much on shares as you can afford to lose.
You may prefer to invest in an Exchange-Traded Fund rather than buying straight-out shares.
ETFs are a collection of assets such as bonds and shares, similar to mutual funds, that can function like individual shares on the market.
They are a less interesting option than share investing for active traders though.
Cathie Wood’s ARK Industrial Innovation ETF (ARKQ) is a prominent example of an ETF where Alphabet is part of a portfolio of assets. Other ETFs with exposure to Alphabet include SPDR S&P 500 ETF Trust (SPY), Invesco QQQ Trust (QQQ), and iShares Core S&P 500 ETF (IVV).
Step 5: Decide your order type
There are several order types to be aware of, which are customised for certain market conditions.
Market order
Market orders mean your order executes at whatever the share price is at the time.
For example, if the price of an Alphabet share is US$2300 and you hit buy, your order will start to go through at that price.
Keep in mind that share price fluctuations may mean that by the time your share purchase is complete, you may pay more or less than US$2300 for your shares.
Limit order
A buy limit order helps you buy shares at a price you nominate (or lower) and can be a useful tool in sticking to an investing budget.
For example, you may decide you will buy Alphabet shares when they reach US$2200 or lower. If and when the shares hit that mark, your trade will start to execute.
Stop limit
This sell order allows you to nominate a price at which you will sell shares.
Let’s say you decide that when Alphabet shares reach US$2400, you are willing to let them go.. When the price reaches that figure, your order kicks in.
Stop loss
A stop loss order helps get you out of a stock that you decide isn’t worth holding onto if it drops below a certain price. Let’s say the Alphabet price plummets to your nominated stop loss price of US$1800. Your order executes and you are saved from any further losses.
Step 6: Place your order
Once you have settled upon an order type, then you can place your order on Alphabet’s GOOG or GOOGL shares – buying the latter allows you to enter shareholder meetings. After this is completed, you wait and see how the market reacts in the time that passes.
The market can be fickle and subject to a lot of factors. It is worthwhile keeping an eye on things such as market trends, news about Alphabet and its competitors, company announcements and reports, and trends in technology as these can all play into the company’s share price.
Tech companies like Google worth tracking include Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Facebook (NASDAQ: FB), and Netflix (NASDAQ: NFLX).
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