I Bought My First-Ever Stock of Tesla
Investing in stocks can be tricky! And when you are doing it for the first time, it can get trickier.
Before buying a company’s stock, you need to do your homework, and have the knowledge to analyze its performance. After all, it’s your hard-earned money and you won’t like to invest in stocks which have lesser prospects of growth.
When it’s about making investments, I tend to ‘play it safe’. I prefer following a conservative approach where I can receive fixed returns on the amounts invested without worrying about the market fluctuations or changes in the economy.
Prior to making my first investment in Tesla, I solely relied on fixed-income accounts such as savings account, fixed deposits, and Public Provident Fund offering interest rates between 2.7% and 7.1% p.a.
I thought the investments in these accounts would be enough to create a financial cushion, and offer a sense of financial security post retirement. Unfortunately, I was wrong! I realized that even if I was receiving $60,000 as the total amount on the principal amount of $40,000, say after 10 years, I was still losing to the time value of money.
By solely aiming on accumulating money in savings and other low-yield paying accounts, I was doing it all wrong. I was not using my savings to build more money. And the day I understood it, I decided to invest in stocks and securities.
I had shared the same with my husband, and a couple of weeks back, I asked him about the latest stocks he had invested in. He mentioned about having invested in Tesla’s stocks at around $700 each.
I was curious to know why he had bought this company’s stock, and why I should buy it as well. Though I had a fair idea that Tesla’s initiative in producing electric cars, solar panels, etc. would benefit the company with tremendous amount of growth and profits ahead, still I wanted to have a more concrete reason for investing my hard-earned money in the company’s stock. I decided to do the real work (research) and find out if I should really buy it or not .
Analyze the market trends
The first thing I wanted to do was analyze the market trends for the company’s stock for the last 10 years and then, I came across this picture:
From a mere $3.84 in 2010 to whopping $833.56, this stock’s value has grown exponentially (around 225 times) in the last 10 years. I bet people, who had bought its stocks back earlier must have a great vision.
If you had invested $10,000 back in 2010 in Tesla, its value would have been over $2 million today. Now, that’s how passive income works!
However, you need to have strong research skills to make valuable investments. You do your research, invest in the right company’s stock at the right time, and let the company focus on increasing its profits and sales revenues, that will ultimately boost your ROI (return on investment).
Besides comparing the company’s performance in different years, you can also strike comparisons among its competitors and analyze which ones are more profitable in terms of investing.
Research the current and long-term plans of the company
While I was impressed with how the company performed in the past 10 years, I wanted to have more concrete facts to support my investment decision. I wanted to know if the company would be able to maintain the trend in the coming years and offer at least reasonable yields to its investors, or will lose its market to competitors.
And then I came across this announcement by the U.S. President, Joe Biden where he mentioned about replacing the entire fleet of federal government-owned vehicles, which was 645,000 in number, with the electric ones with a view to support environment sustainability and promote clean energy. This move will not only improve the country’s economy, but will also be beneficial for country’s major electric vehicle manufacturers including Tesla.
Also, there have been estimates that this buying strategy could increase the electric vehicles’ number in the country by whopping 40%. Of course, the execution of this rollout will take time. But if properly implemented, not only the EV companies in the U.S. will be benefitted, but also the investors putting their money in their shares.
Now, I was convinced to buy at least one stock of the company! From the day I had discussed it with my partner till today, the company’s stock had already gone up by around $100. The more time I spent on taking my decision, the more money I was going to pay for the stock. So, without wasting a single minute, I bought one stock of Tesla, my first-ever investment in the financial world.
Though the price of the stock was over $800 at the time I bought it, it didn’t bother me much. I was looking at the bigger picture believing that the company would offer amazing yields in the coming years.
I follow the ‘invest and forget’ strategy for my long-term investments. However, I make sure to do my part of digging into the details of the company and knowing its growth prospects.
Find out the company’s short-term and long-term goals, know what’s trending about the company, how those trends/news would affect the price of its stocks in future, and then invest accordingly.
When it is about making investments, every person has different goals.
Figure out your motive behind making such investments. Also, know it beforehand if you want to make short-term gains or devise a long-term strategy. If you are not sure about your investment goals, you might mess up your finances.
This was my first investment in stocks, and honestly, it took a lot of determination and research into taking this step. Even if the world of stock market is highly unpredictable, I am reasonably happy with my first investment. It’s my first investment, and indeed, not the last one!
Of course, if I had invested in this stock even a couple of years back, I would have had better returns. But seeing the brighter side, it’s not that late! Relying on the company’s potential and stats, I bought its stock and believe that it’s going to fetch at least reasonable returns in the coming years.
Now that I have realized the importance of making investments, I’ll keep hunting for more stocks from different industries to have a diversified portfolio, invest in the promising ones and let money work for me.