Contemplating an investment in Microsoft? If you don’t know the ins and outs of investing, we’ll take you through all the basics and help you make a Microsoft investment that adds up. If you think you’re ready to invest in stocks & shares, we will show you how below. If you want to learn more before risking your money, keep reading.
Compare the best platforms to invest in Microsoft shares
Ready to invest in Microsoft’s stock? Check out the links below to find an online broker that works for you. Our helpful guides detail the best investment choices, break down the best online brokerages, and explain various different methods of investing.
Trade Microsoft shares, right now
Looking for more excitement and faster profits than you might find in long-term investing? Consider trading shares instead. When you trade shares of a stock like Microsoft, you’re buying and selling your shares in a short amount of time (buying and selling shares on the same day is called day trading). Read on to see which online brokers offer the best platforms and most affordable fees for high-volume trading.
How to Buy Microsoft shares in 7 simple steps
If you want to be successful in buying Microsoft stock, you should read up on how the company operates and how the stock tends to perform. That way you’ll know what you’re getting yourself into.
If you’re just starting out, consider buying Microsoft shares using a relatively small amount of money. You can devote more resources to investing once you’ve gained more experience. Here’s an investing checklist to help guide your decisions:
- Know the company. What is Microsoft? How did the company get started? How did it become the biggest software company in the world? Is the company’s growth still strong? How well equipped is Microsoft to grow in the future? The more you know about Microsoft’s business, the better prepared you’ll be to invest with confidence.
- Learn the basics. Learn all the terms that come with stock investing. Get to know key fundamentals such as revenue growth and earnings growth, as well as trading terminology like bid price and ask price. Also, get to know how to invest in and trade shares of Microsoft. Some of the most common methods include share-dealing, trading, and contracts for difference (CFDs) — more on all of these shortly.
- Share-dealing vs Trading. Share dealers buy Microsoft shares. There are two ways to make money in share-dealing. You can sell shares at a higher price than your buy price, or in some cases, collect dividends (note: not all companies issue dividends). Trading is a shorter-term approach to investing, which can include buying and selling shares of a company on the same day (a practice known as day trading). When you day-trade shares of Microsoft, you’re focused on Microsoft’s stock chart, not the company’s long-term future.
- Set your budget. When you first start investing, consider going with a smaller budget, say £1,000 or less. Microsoft’s stock currently trades around $150 a share, meaning you could buy a handful of shares with a £1,000 investment. As you gain experience, you can increase the size of your investments.
- Choose a broker that’s right for you. Many online brokers will provide a reliable platform you can use to buy shares, including shares of Microsoft. Still, every online broker is different. Find an online broker with low fees, a strong reputation, and an easy-to-use trading platform.
- Evaluate market conditions. When the market goes up for an extended period of time (a “bull” market), most stocks go up too. But when the market goes down for an extended period of time (a “bear” market), many stocks do the same. When a bear market occurs, your chances of failure increase when buying shares of individual stocks.
- Make your first investment. You’ve got a good feel Microsoft’s business. You understand the basics of how to invest. You’ve got a budget that makes sense given your level of experience and your disposable income. You’ve found a good online broker. You’ve confirmed that the market is in an uptrend. Next, log into your online brokerage account, type in Microsoft’s ticker symbol (MSFT), make sure the stock price makes sense, then hit Buy. Voila, you now own shares of Microsoft.
Ways to invest in Microsoft – share-dealing vs trading
There are multiple ways to buy, sell, and trade shares of Microsoft. Here are a few of them:
When share-dealing, you’re buying Microsoft shares. Share-dealing is a longer-term strategy than trading shares, since you’re hoping for a quicker profit when you trade shares.
- Pros: When you buy and hold, you don’t need to become an expert at reading stock charts; if Microsoft’s stock starts going up, holding onto the stock could pay off in a big way.
- Cons: When share-dealing in an attempt to hold for big gains, you’re also tying up your available capital for a long time, thus limiting your ability to make other transactions; if Microsoft’s stock starts falling after you buy, it might be difficult to sit through a big correction.
A contract for difference (CFD) is an investment derivative that lets you speculate on the price movement of an asset. You’ll find CFD contracts for foreign currency, commodities such as gold or oil, stocks like Microsoft, and other assets. When CFD trading, you don’t actually own currency, oil, or Microsoft shares. Instead, you’re temporarily holding a contract pegged to the short-term price movement of one of those assets.
- Pros: CFD trading only requires you to put up a percentage of the total trade value, with the broker providing the rest (this is called leveraged trading). In leveraged trading, you make a lot more on a successful trade than you would if you’d only ventured your own money.
- Cons: Leveraged trading works both ways – you stand to lose more than you would on a regular trade if Microsoft’s stock price goes down. It’s also worth noting that you can rack up overnight fees for trades that stay open for more than a day. Because you lose the voting rights and potential dividends that can come with owning shares, CFD trading might be viewed as less beneficial for trading stocks than it is for trading commodities.
The more you learn, the more likely you’ll be to make money when CFD trading Microsoft shares. Read our guides and courses to learn more about CFD trading. Ready to give this practice a try? Click on the links above.
How to buy, sell and trade Microsoft shares for beginners
Thinking about investing in Microsoft shares? Here’s what you need to know:
Buying Microsoft shares
When buying Microsoft shares, you can easily do so through an online broker. Buying Microsoft shares makes sense if you want to buy a stock, then hold it for a while. Log into your online brokerage account, type the ticker symbol of the stock you want to buy (Microsoft: MSFT), then click Buy. Now you own shares of Microsoft.
It goes without saying that you want to sell your Microsoft shares at a higher price than the price at which you bought them. One option when selling shares is to hold for as long as possible, hoping to land the biggest possible gain. Alternatively, you might choose to sell your shares earlier, a smart strategy if a bear market pops up.
When trading Microsoft shares, you can trade through a typical online broker, or through a CFD broker. If you choose a CFD broker, know the risks that come with leveraged trading, as well as the additional fees that CFD brokers charge.
Our top tips for investing in shares of Microsoft
Now that you have an overview of how to invest in Microsoft shares, let’s review a few key points:
- Know your budget. Don’t invest more than you can afford to lose. You don’t want to torpedo your financial future.
- Choose the right strategy for you. Tailor your investment strategy to your investment goals and risk tolerance. Don’t try more complicated methods of trading until you’ve gained more experience.
- Stick to a sound plan. Use a thoughtful investing plan to increase your likelihood of success. Fear and greed can cause you to make bad decisions. A smart investment plan can help prevent that from happening.
- If market conditions change, adjust. In a bear market, few stocks escape the prevailing downtrend. Follow the broad market, and be prepared to adjust if you have to.
- Learn from your mistakes. It’s normal to make mistakes when investing. The important thing is that you learn from those mistakes. You’ll then be less likely to make a mistake in the future.
Unsure which platforms to use?
Still not sure how to proceed? Here are a few more investing factors to consider:
- Budget size. If you have a budget of £1,000 or less, you might choose to buy a few shares of Microsoft. If you have a larger budget (say, more than £10,000), more investment options start to make sense. These investment options include CFD trading, day-trading, and buying more shares.
- Risk assessment. You’ll be better able to cope with risk after you become more knowledgeable and experienced. For a more complex strategy, you could sell shares of Microsoft short, if you think the stock’s price will fall. Want to stay conservative? Try this: Say you buy shares of Microsoft at $150. You can put in a stop-loss order at $135. That way, if Microsoft’s stock falls to $135, your broker triggers an automatic sell, and you don’t lose more than 10% on your investment.
- Market conditions. In a big downtrend (a bear market), buying defensive investment vehicles like bonds and commodities can be safer than buying a growth stock like Microsoft. But if the market’s doing well, buying Microsoft shares could prove lucrative. Follow the latest market news on our site to make intelligent investment decisions.
- Set your investing goals. Want to make money quickly? Day-trading shares (buying and selling on the same day) could be worth a try. If you want to buy Microsoft shares, then hold for 30 years? You can opt to do so with a stock like Microsoft, betting that the company will succeed for many years to come.
- Follow emerging trends. New technology brings new investment opportunities. Decades ago, Microsoft grew to become the biggest software company in the world. To maintain its role as a tech leader, the company will need to keep innovating.
What is Microsoft?
Microsoft is the world’s largest software company, taking advantage of early-mover status, great company leadership, and smart business practices to reach the top of the heap. Microsoft has ramped up its growth again in recent years, leading to gaudy gains for its stock. To find out more about the company, including charts, live prices, analysis, and more, see our Microsoft stock price page.
Try some of our stock market courses for beginners
Not ready to invest in Microsoft shares? Study our website and you’ll learn important investing lessons from our educational courses. Mastering the best investing and trading techniques will prepare you to buy stocks like Microsoft.