Are you weighing up an IBM investment? It’s important to know the ins and outs of the stock market before you take the plunge. Our guide to investing in IBM stock offers an easy to digest introduction to the basics that should help you on your way to becoming a clued up investor.
If you’re ready to invest in IBM shares, make sure you check out our useful links below. Want to learn more first? Keep reading.
Buy IBM stock, right now
Ready to buy IBM stock? Review the links below to find an online broker that works for you. Our helpful guides show you the best investment choices, the best online brokerages and various different methods of investing.
Trade IBM shares, right now
As an alternative to investing, you might consider trading shares in IBM. When trading shares in a stock like IBM, you’re buying and selling shares over a short span of time. Check out our site to discover the best platforms for higher-volume trading.
How to buy IBM stock in 7 simple steps
If you want to make money buying IBM stock, do your research. Find out how the company operates and how the stock has historically performed. Learning fundamental analysis (the importance of earnings growth, revenue growth, etc.) and technical analysis (how to read charts and properly time your trades) will improve your chance of making money on your investment.
Just starting to invest? Consider buying a smaller number of IBM shares, using a smaller amount of money. You can always invest more aggressively as you become more experienced. Here’s a checklist to guide your decisions:
- Know the company. What is IBM? How did the company get started? How does the company’s earnings growth and revenue growth compare to its top competitors? What is IBM doing to differentiate itself in a crowded marketplace? The more you know about IBM’s business, the better prepared you’ll be to invest with confidence.
- Learn the basics. There are lots of terms associated with stock investing. When analysing fundamentals, you want to learn what terms like revenue growth, earnings growth and return on equity mean. When trading, it helps to understand terminology like bid price, ask price and stop-loss orders. You’ll also want to learn about the different methods used to invest in and trade shares. Some of the most common methods include share-dealing, trading, and contracts for difference (CFDs).
- Share-dealing vs Trading. Share-dealing means buying shares in a company. When share-dealing, you can make money by selling shares at a higher price than your buy price or by collecting dividends (if it’s a company that earmarks part of its profits for dividends). Trading is a shorter-term approach to investing, which can include buying and selling shares in a company on the same day (day trading). When you day trade shares in IBM, you’re looking for patterns within the stock chart. The company’s long-term future tends to be less relevant.
- Set your budget. When you first start investing, consider going with a smaller budget, say £1000 or less. IBM’s stock currently trades around $135 a share, meaning you could buy a few shares with an investment of less than £1000. As you gain experience, you can always choose to invest more.
- Choose a broker that’s right for you. Look for an online broker that offers low fees, a strong reputation, and a reliable, easy-to-use trading platform.
- Evaluate market conditions. In a ‘bull market’ (a long-term uptrend), most stocks will rise. In a ‘bear market’ (a long-term downtrend), most stocks will fall. It’s probably wise to avoid buying stocks when a bear market is raging.
- Make your first investment. You now understand IBM’s business, and the basics of how to invest. You know your budget. You’ve found a reputable online broker and you’ve decided that market is in a good place. Log into your online brokerage account, type in IBM’s ticker symbol (IBM), make sure the stock price isn’t too high, then hit Buy. You now own shares of IBM.
Ways to invest in IBM – share-dealing vs trading
There are multiple ways to buy, sell, and trade IBM stock:
Share-dealing consists of buying shares in a company. Share-dealing is a longer-term approach to investing than trading shares, since you are aiming for gains over the long haul, rather than a quick sell.
- Pros: When you buy and hold, you can devote most of your energy to fundamental analysis; if IBM’s stock starts rising, holding on could lead to big gains as time goes on.
- Cons: When you’re engaged in share-dealing you’re often locking up your money for long periods of time, thus limiting your ability to make other investments. If IBM’s stock starts falling after you buy you might soon find yourself staring at a big correction.
A contract for difference (CFD) is an investment derivative that lets you bet on the price movement of an asset. Some assets targeted by CFD traders include commodities, foreign currency, and stocks. When CFD trading, you don’t actually own currency, oil, or shares of IBM. Rather, you’re holding a contract pegged to the short-term price movement of an asset.
- Pros: CFD trading only requires you to put up a percentage of the total trade value. The broker chips in the rest (a method known as leveraged trading). With leveraged trading, you can make more on a successful trade than you would if you only ventured your own money.
- Cons: Leveraged trading can cause you to lose more than you would on a regular trade. CFD trading incurs overnight fees for trades that stay open for more than a day. CFD trading can be less beneficial for trading stocks than it is for trading, say, commodities, because you lose the voting rights and potential dividends that can come with owning shares.
Read our guides and courses to learn more about CFD trading. If you’re ready to dive into CFD trading, click on the links above.
How to buy, sell and trade IBM shares for beginners
Want to buy shares of IBM? Here’s what you need to know:
Use an online broker when buying shares. Buying shares (also known as share-dealing) is a good move if you want to buy and then hold a stock. Log into your online brokerage account, type the ticker symbol of the stock you want to buy (IBM’s ticker symbol is, simply enough, IBM), then click Buy. Congratulations, you now own shares in IBM!
Fundamentally, you want to sell your shares at a higher price than the price at which you bought. One option when selling shares is to hold for as long as possible, hoping for the biggest possible gain. Or you could choose to sell your shares earlier, which makes sense if a bear market comes into play.
When trading shares, you can go through either a typical online broker or a CFD broker. If you choose a CFD broker, know the risks that come with leveraged trading and the fees that CFD brokers charge.
Our top tips for investing in shares of IBM
Now that you have an overview of how to buy IBM’s stock, let’s go over a few key points:
- Know your budget. Don’t invest more than you can afford to lose. Investments can be a good way to grow your nest egg, but they’re not worth risking your financial future by putting too much money on the line.
- Choose the right strategy for you. Your investment strategy should make sense for your specific investment goals and risk tolerance. If you’re a beginner, bet small and choose the simplest investing methods you can find.
- Stick to a plan. A sound investment plan can increase your likelihood of success. It can also help prevent distracting emotions like fear and greed from taking over.
- If market conditions change, change course. In a bear market, few stocks make it through unscathed. Follow the market’s daily and weekly movements on our site and be prepared to make adjustments.
- Learn from your mistakes. Making mistakes when investing is OK, as long as you learn from them. If you’re able to identify what went wrong you can amend your approach and develop your trading skills going forward.
Unsure which platforms to use?
Not sure how to proceed? Consider these investing factors:
- Budget size. If you have a budget of £1000 or less, you can afford to buy a few shares in IBM. If you have a larger budget (say, more than £10,000), other investment options and investing platforms could be better options. These might include CFD trading platforms, as well as day trading with a low-fee online broker.
- Risk assessment/risk management. If you want to manage risk, try using stop-loss orders. Say you buy shares in IBM at $135, you can put in a stop-loss order at $121.50. If IBM’s stock falls to $121.50, an automatic sell order will protect your investment, meaning you won’t lose more than 10%.
- Market conditions. In a big downtrend (bear market), defensive assets like bonds and commodities can be safer than growth stocks like IBM. If the market’s doing well, buying IBM shares could become more lucrative. Follow the latest market news on our site to make sound investment decisions.
- Set your investing goals. Day trading shares (buying and selling on the same day) makes sense for traders who want more frequent action. If you’d rather set it and forget it, you can buy and hold a stock like IBM, betting that the company will succeed for years to come.
- Follow emerging trends. New technology brings new investment opportunities. One of the world’s first major tech companies, IBM has moved toward a new generation of innovation lately, pursuing opportunities in the fast-growing field of blockchain technology. Look for the company to find innovative ways to leverage newer forms of technology and – potentially – regain some of its former glory.
What is IBM?
Founded in 1911, IBM is a multinational information technology company. IBM’s recent foray into blockchain-related projects has helped lift the stock’s fortunes, after years of IBM’s stock lagging behind many tech contemporaries. To find out more about the company, including charts, live prices, analysis, and more, see our IBM stock price page.
Try some of our stock market courses for beginners
Not ready to invest? See the educational courses on our website to learn more. Mastering the best investing and trading techniques will help prepare you to buy profitable stocks.