Are you contemplating an investment in the British supermarket giant Tesco? We’ve produced a series of educational articles and guides to help you invest in Tesco stock and improve your chances of making handsome profits in the process.
Follow the helpful hints below, then make your first trade. Not ready to start investing? Keep reading.
Buy Tesco stock, right now
Buying shares is typically a strategy meant to encourage longer-term holding, with the goal of making a much bigger profit than you would by flipping stock after a day or two. Our helpful investment guides profile the best brokers and review different ways to buy shares in Tesco.
Trade Tesco shares, right now
Trading Tesco shares is your best bet if you’re looking for shorter-term results. When you trade shares, you’re buying and selling within a much shorter period of time, sometimes on the same day (a practice that’s called day trading). We’ve reviewed a wide choice of low-fee online brokers that are well suited to this sort of approach.
How to buy Tesco stock in 7 simple steps
Here are seven key points to remember when looking into buying shares of Tesco.
- Know the company. What is Tesco? What led the company to expand from grocery store operator to a wide range of additional interests? The more you know about the company, the better you’ll understand the investment you’re about to make.
- Learn the basics of investing. That includes the key terms that go with stock market investing, the different ways you can trade and invest in stocks, and much more. Check out the articles and how-to guides on this site to help you navigate the investing process.
- Share-dealing vs Trading. Share-dealing is another way to say buying and holding a stock for an extended stretch of time. If you’ve heard the expression “buy low, sell high,” that’s share-dealing. Trading shares is a shorter-term tack, and can include day trading. When you day trade shares of Tesco, you need only focus on technical analysis; the company’s future outlook doesn’t really matter.
- Set a budget. When you start investing, use a smaller budget, maybe something like £1000. Tesco currently trades around £250 a share, so you can buy four shares with that budget. As you gain experience, you can get more aggressive and put in more.
- Choose a broker. The best online brokers offer a strong reputation, an easy-to-use platform, and low transaction fees. Peruse our site to find one that works for you.
- Evaluate the broad market. Individual stocks tend to follow the broad market’s direction, going up during “bull” markets (big uptrends) and down in “bear” markets (big downtrends). If the market starts to tumble hard, be ready to sell your positions.
- Make your first investment. You’ve done all your research and confirmed that the stock market’s looking healthy. Log into your online brokerage account, type Tesco’s ticker symbol (TSCO), make sure the stock is trading at a price that isn’t too high, then buy.
Ways to invest in Tesco; share-dealing vs trading
You can buy, sell, and trade shares of Tesco online in numerous different ways. Two of those methods are share-dealing and trading:
Share-dealing involves buying and holding shares of a company, whereas trading shares is a method you use when you’re aiming for a quick profit.
- Pros: Buying and holding could result in big gains if you buy the right stock under the right market conditions; when share-dealing, you can devote your attention to studying the company’s fundamentals, rather than trying to become an expert in technical analysis.
- Cons: Buying and holding means the capital you invested in that stock is tied up and thus not available for other trades; buying and holding sounds simple in theory, until the market wreaks havoc on your investment, and you have to decide if you’re willing to sit through a 30% correction.
CFD stands for contract for difference. CFDs allow you to speculate on the price movement of investment assets, in either direction. You can bet on assets such as commodities, forex, and shares of Tesco to either go up, or down. When CFD trading, you buy (and sell) a contract, but you don’t own the actual asset you’re trading.
- Pros: CFD trading enables you to trade with leverage, giving you the ability to wager a percentage of the total trade value in the form of a deposit or ‘margin’. When trading with leverage you can make more money because you’re not limited by your own bankroll.
- Cons: Leveraged trades are more lucrative when you buy a stock and it goes up, but they also incur bigger losses when you buy a stock and it goes down. Leave a leveraged CFD position open more than a day and you’ll likely pay extra fees.
Owning shares in a company entitles you to voting rights and can enable you to rack up dividends. CFD trading doesn’t come with these benefits.
Read our online articles and courses to improve your investing knowledge. If you’re ready to buy, click the links above.
How to buy, sell and trade Tesco shares for beginners
Here are some basic facts to take on board before you take action:
Buying shares is typically done when you want to hold a stock for a longer period of time. Buying is easy, simply log in to your online brokerage account, type in Tesco’s ticker symbol, and click Buy.
There are numerous selling strategies to consider. Day trading is a way to sell for quick profits, while selling shares after holding them for a long time is intended to produce a much bigger profit. Alternatively you might decide to sell quicker than expected if you’re worried a prevailing bear market might be about to tear into your profits.
Trade shares with a conventional online broker, or with a CFD broker. If you use a CFD broker, know the risk that comes with leveraged trading and consider the extra fees that CFD brokers charge.
Our top tips for investing in shares of Tesco
Here are five important points to consider when investing:
- Choose the right investing approach. We’ve already discussed a number of different investment strategies, from buying shares to day trading to CFD trading. Make an honest assessment of your own investing goals so you can pick the path that works best for you.
- Know your budget. You don’t want to lose more money than you’re able to afford. Set a budget that makes sense for your level of risk tolerance and financial well-being. When you’re just starting out, you can always put less money on the line.
- Don’t react to emotions. If you don’t have a sound investment plan, emotions like fear and greed can overwhelm your judgment and cause you to make counterproductive investing decisions.
- When market conditions change, change course. If the market starts falling sharply, it’s often best to sell your shares. Always keep the state of the market in mind when making investment decisions.
- Learn from your mistakes. Don’t beat yourself up for making a mistake. Instead, review the investment decisions you made, figure out what went wrong, then work on correcting those mistakes so you can do better next time.
Unsure which platforms to use?
Not sure what to do now? That’s OK. We’re help to help you, by discussing these key investing elements that will simplify your decision-making process:
- Budget size. If you’re just starting out and have a budget of £1000, you can simply buy four shares of Tesco, then hold in an effort to snag a profit. If you have a bigger budget (for example, more than £10,000), you can consider more intricate techniques such as day trading and CFD trading.
- Risk assessment. One of the best ways to manage investment risk is through stop-loss orders. Say you buy shares of Tesco at £250 per share. You can then put in a stop-loss order at £225 per share. If Tesco’s stock starts to fall, you won’t lose more than 10% with that stop-loss order in place.
- Market conditions. In a bear market, buying bonds or commodities are defensive strategies that often work better than chasing growth stocks at sky-high prices.
- Know your investing goals. Day trading makes sense if you’re hoping to become a more active trader who’s also adept at reading stock charts. If you think a stock could be a long-term winner, buy and hold shares instead.
- Follow emerging trends. Tesco has gone through two major periods of evolution. In the 1960s, the company started diversifying its operations, moving from grocery retailer to a company that would go on to sell books, clothing, and financial services, and decades later software and Internet services. In the 90s, it began expanded from its UK roots into other markets, and now operates in 11 countries. For Tesco to succeed in the future, its ability to remain agile and change with new trends will be vital.
What is Tesco?
Founded in London in 1919, Tesco operates under nine different subsidiaries, operating a chain of grocery stores and numerous other ventures. The company employs 450,000 people, with year-end 2019 revenue just shy of £64 billion. For more information on the company, including charts, live prices, analysis, and more, visit our Tesco stock price page.
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Check out the easy-to-follow articles and guides on this site, and you’ll improve the depth and breadth of your investing knowledge, improving your chances of making money when buying shares of Tesco.