How to buy Cisco shares (CSCO)
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This page looks at the history of Cisco Systems, its recent share performance, and its prospects for the future. You can also keep reading to find the latest news and market analysis as well as the best brokers with which to invest.
Compare the best Cisco trading platforms
If you have all the information you need and just want to invest, you can start immediately by visiting one of our trusted brokers below. We’ve assessed all the best platforms so that picking the right choice for you is quick and easy. If you’re not ready to invest yet, keep reading for more information on Cisco.
How to buy Cisco stock, a step-by-step guide
The process 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. 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 Cisco shares.
- Place an order for CSCO stock. Search for Cisco’s ticker symbol (CSCO) 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 Cisco shares will be listed in your account. Congratulations, you’ve just bought shares in Cisco!
What is Cisco? And should I invest?
Cisco Systems (NASDAQ: CSCO) is an American multinational technology company. It designs and supplies network hardware, software, and a range of other IT services and products. Cisco was an early network pioneer and one of the first companies to successfully introduce routers that could support local area networks. It went public in 1990.
Cisco has raised its dividend for 10 years in a row and is well established in an industry that looks stable in the long term. It’s also a global company, with a significant presence in Europe and Asia alongside its home market of the US, that should insulate it from local market events.
Any wider slip in the stock market after long term gains would affect Cisco but its fundamentals are sound. Technical analysts can dig deeper into the stock and assess whether there is an opportunity to benefit from market corrections in the short term or keep reading to get more of an idea about Cisco’s historic performance.
How has Cisco performed in recent years?
For a long time, Cisco performed strongly despite broader market uncertainty. But there were signs before the pandemic that some of that uncertainty was starting to manifest itself in the share price. Steady growth for nearly a decade peaked close to $60 – close to the highs Cisco experienced during the dot com boom – in 2019 before lacklustre results saw it fall in the latter part of the year.
Cisco’s strong performance prior to the most recent corrections has been on the back of constant growth in the IT sector and a series of acquisitions to strengthen its all-round offering. It has tended to use those acquisitions to address any weak spots in its systems, such as buying the cybersecurity startup Duo Systems in 2019, to keep it at the forefront of the industry.
The pandemic saw a significant decrease in business orders, with far less demand for workplace networks, although this was somewhat offset by an increase in demand for remote technology. Although it did suffer from the pandemic market fall, the share price quickly rebounded back to $47, where it began the year. It fell again later in 2020 after a lower-than-expected revenue announcement, but once again rebounded fairly well.
Is it a good time to buy Cisco shares now?
CSCO has been a good performing stock for a while and increased its dividend every year for a decade, so it is well placed for long term returns. Cisco has a strong balance sheet and benefits from its sheer scale, protecting its dividend and even allowing it to continue its share buyback scheme during 2020. It has also regularly looked to acquire companies that offer modern technology to support their existing offering, so it’s usually quick to react to changes in the market.
In 2020, the explosion in demand for cloud software led to a deal for the UK customer service software provider IMImobile. This is in addition to a 2019 move for Acadia Communications, similarly strengthening its investment in cloud computing. Cisco is looking to switch its software to a subscription model to make it less vulnerable to economic shocks which, combined with its cybersecurity acquisitions, aims to protect it against most foreseeable issues in the IT space.
Cisco has explained their recent falls in hardware demand as being down to geopolitical uncertainty and supply chain problems, which could be seen as a positive as the global economy settles down in the aftermath of Brexit and the coronavirus. There is still likely to be some uncertainty regarding the relationship between the US and China, which is something to consider. You can follow those developments, along with all the latest from Cisco, below.
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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 Cisco shares.
- Research the company. You should always examine the fundamentals of a company before buying its stock. What is Cisco? How did the company get its start? How did it grow? Is Cisco’s revenue and profit growth picking up? Is the company innovating? The more you know about Cisco, 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 investing 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 reviews can help you find the right broker.
- 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 Cisco shares. Here’s a quick run-through of what’s involved in each.
This process involves finding a broker and placing an order for Cisco 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.
When you sell any Cisco 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 the stocks for a long time, hoping to benefit from the company growing steadily throughout. Or, if you see that Cisco’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 is the same process, 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 Cisco 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.
Share dealing vs 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 CSCO 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 learn about CFD trading to get you up to speed.
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 find the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade 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 fund your account with 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.
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