Shares in e-commerce giant Amazon are among the most valuable and regularly traded in the world. Find out if now is the right time to invest in Amazon stock.
This guide takes you through how to invest in Amazon shares, what to consider before you buy shares, and the best stock brokers online with which to execute your trades. Keep reading to find out more.
Compare the best platforms to invest in Amazon shares
If you’ve already decided you want to invest in Amazon shares, then simply find your perfect broker in our comparison table below. These platforms are the best places to buy and trade Amazon shares.
How to buy Amazon shares, a step-by-step guide
The process of buying shares in Amazon isn’t massively complicated, so don’t worry even if you’re new to stock investing. These are the steps to follow in order to complete your investment:
- Choose a broker. In order to buy Amazon stock, you will need to use an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Amazon shares.
- Place an order for AMZN stock. Now navigate to the broker’s buying stocks page (a link to this can be found in the menu on the website). Here you’ll be able to search for Amazon’s ticker symbol (AMZN) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you wish to buy and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Amazon shares will be listed in your account. Congratulations, you’ve just bought shares in Amazon!
What is Amazon? And should I invest?
Amazon is the largest online retailer in the world, and started out as an internet book store in the mid-1990s. Since then the company has grown into one of the most famous companies in the world, selling virtually any item you can imagine and redefining consumer behaviour across the planet.
Whether you should invest in AMZN shares depends on your financial goals. Below you’ll find details about how the stock has performed both historically and recently, and you need to consider whether you want to put your money into an established company whose shares cost upwards of $3,000, or you think you can find more value elsewhere.
Visit our Amazon Quote page for more information on Amazon, including charts, revenue statistics, and insider information. Keep reading below for help in making the right investment decision for you.
How has Amazon performed as an investment in recent years?
Amazon has been one of the great success stories of recent times. Shares in the company have rocketed from just $18 in the company’s 1997 IPO, to over $3,000 today – an increase of over 17,000% overall. Much of this growth has been generated in the last few years, with AMZN shares having more than tripled in value since 2017.
Amid this impressive performance, Amazon also saw its stock price grow by over 30% throughout the coronavirus pandemic. The pandemic saw demand for online shopping and delivery services increase around the world, so it was a good time to be an e-commerce giant.
Amazon is a company with a solid foundation, global recognition, and a world-class logistics network, all of which have seen it continue to grow rapidly throughout the twenty-first century.
Is it a good time to buy AMZN shares now?
It’s rarely a bad time to invest in Amazon. As detailed above, it has been one of the best performing stocks this century, with staggering surges in price often being seen over short periods of time. The company is also not resting on its laurels, with plans to expand into various markets from groceries to pharmaceuticals in years to come.
This combination of AMZN shares having done little but rise over the past couple of decades and the company’s forward-thinking outlook has made Amazon extremely popular with investors. You can learn more about the stock’s performance, and whether it’s the right moment to buy shares yourself, by reading our most recent market analysis below.
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Buying, selling and trading Amazon shares for beginners
What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before investing in Amazon shares.
- Research the company. You should always examine the fundamentals of a company before buying its stock. What is Amazon? How did the company get its start? How did it grow? Is Amazon’s revenue and profit growth picking up? Is the company innovating? The more you know about Amazon, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Amazon shares. Here’s a quick run-through of what’s involved in each.
Buying Amazon shares
This process involves finding a broker and placing an order to buy Amazon stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
Selling Amazon shares
When you sell any Amazon shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Amazon’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading Amazon shares
Trading is the same process as buying and selling shares, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade Amazon shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Ways to buy Amazon shares: share dealing and CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into AMZN shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed.
If neither of these options appeal to you, then you can find a variety of other ways to invest in AMZN stock on this page. If, however, you’re ready to buy Amazon shares now, simply select one of the brokers in the table above and get started.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually use the broker to buy the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place trades and buy shares. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to buy Amazon shares using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.