Buy Tesla Stock. Is it Worth Buying Tesla Stock 2021?

Tesla Company is a car manufacturer that has been in the news for all of the wrong reasons. The company was founded by Elon Musk and it's headquartered in Palo Alto, California. Tesla cars are known to be electric vehicles which means they don't have any combustion engine or gas tank. They use lithium-ion batteries as their power source.


These batteries can store up to 80 kWh of energy which makes them capable of driving over 500 miles on one charge. This battery technology allows these cars to travel from Los Angeles to San Francisco without stopping. It also helps reduce emissions since there is no need to burn fuel while traveling.

Tesla stock price started its journey around $20 per share but now it’s trading above $300 per share. In this article I will try to answer some questions about this amazing company so you would know more about it:

Process Of Buying Tesla Stock

Find a broker or financial advisor: This step is very important since this person would be handling all your finances. Make sure you choose someone who has experience trading securities. They must also have knowledge about different types of accounts including IRA account.

Open up brokerage account: Once you find a good broker, open up a brokerage account. It can either be online or offline depending upon how comfortable you are using technology. In any case, make sure you pick an account type suitable for long-term investing.

Fund your brokerage account: Now it's time to deposit money into your account. Remember, don't put more than what you need so that you don't incur penalties. The amount should cover at least six months' expenses.


Buy some ETFs: An exchange-traded fund is similar to mutual funds. Instead of buying stocks one by one, you simply purchase shares of ETF. These shares represent fractional ownership of the entire fund.

Invest regularly: Don't invest sporadically because if the market goes against you, you will lose everything. Your investment plan should include both short-term and long-term plans. Short-term goals could be saving for vacation while long-term goals could be retirement.

Monitor performance: Keep tabs on your investments. If you notice anything suspicious like large losses, contact your broker immediately.

Rebalance portfolio periodically: As markets fluctuate over time, rebalancing helps maintain proper allocation between various asset classes.

Save tax-efficiently: There are many ways to save tax when investing. One way is to use 401k instead of a taxable account. Another option is to contribute directly to Roth IRA.

Benefits of Buying Tesla Stocks

No commissions: When you trade through brokers, there are always charges involved. Brokers charge a commission based on the size of the transaction. However, when you trade through ETFs, no commission is charged.

Low minimum balance requirement: Most brokers ask you to set aside $1000-$2000 before making trades. With ETFs, you only need to meet the initial contribution limit.

Easy access: You do not require ID verification to trade in ETFs. All you need is an internet connection.

Flexibility: Unlike traditional brokers where you cannot change your mind once an order is placed, you can cancel orders anytime without penalty.


Liquidity: Since ETFs are listed on exchanges, they tend to move faster compared to individual companies. For example, it usually takes less than 5 minutes for S&P 500 index to go down by 2%. On the other hand, it may take weeks for company-specific stocks to decline even 1% due to illiquidity.

Lower risk: Because ETFs track indexes rather than single security, their risks are lower. Also, unlike with individual stocks, you won't face liquidity problems as these ETFs are liquid enough to satisfy demand from investors.

Tax efficiency: By contributing to IRAs, you get tax benefits such as deduction of contributions and interest earned. This means that after paying taxes, you end up with higher returns.

Better diversification: Due to the low-cost structure, ETFs offer better diversification opportunities than individual securities. For instance, if you have 10 different stocks in your portfolio, chances are high that all but one of them would perform poorly during bearish periods. But if you invested in 100 different stocks, then most likely none of them would underperform.

Easier trading: Trading through ETFs is easier than trading through brokers. In fact, you don't even need a brokerage account to buy or sell an ETF. Just log into any online platform, select the "ETF" tab, enter the ticker symbol and amount, click the 'Buy/Sell' button, and voila!

Cons 

High volatility: While market indices provide stability, individual stocks often experience wild swings. Therefore, it's important to understand how much exposure you want to put in each sector.

Lack of transparency: Individual stocks give more control to shareholders. They also allow you to see what management does behind closed doors. However, this information isn't available in the case of ETFs.

FAQs

What exactly is Tesla? And what does it do?

Tesla sells luxury electric cars and energy storage systems. Its mission statement reads "To accelerate the world's transition to sustainable transport." As far as automobiles go, Tesla produces only two models – The Model S sedan and the X SUV. Both of these come with an 85kWh battery pack. That gives each vehicle a range of 265-280 miles. But if you want to drive further than 280 miles then you should consider buying second-hand models because new ones come with 90kWh battery packs.

How much profit does Tesla make? Is it worth investing money into Tesla stocks?

The short answer is yes! If you invest right when shares hit 52 week low, you could see your investment double within 6 months. Of course, there is risk involved like every other business venture. However, if you follow proper analysis techniques, you won't get burned out easily.

Does Tesla pay dividends? When will we start seeing profits?

Yes, Tesla pays a quarterly dividend of $0.15/share. Investors who bought shares during initial public offering back in 2010 saw their investments triple after 4 years. So, even though Tesla isn't profitable yet, investors still stand to gain big time once things turn around.

Where did the name Tesla come from?

Elon Musk named his first startup Zip2 Inc. After he sold it to Compaq in 1999, he decided to create another company called SpaceX. He later changed the name to PayPal before selling it to eBay in 2002.

Why doesn’t Tesla sell directly through dealerships?

This question might seem weird but hear me out. Dealerships take advantage of customers by charging high prices for parts and services. For example, let’s say you buy a used car from dealership A. You may end paying a higher price compared to dealer B where you purchased a brand new car. Also, dealerships often add additional fees such as service contract fees, taxes, etc. On top of that, they usually require a down payment which puts an extra burden on buyers.

Can I resell my Tesla?

You cannot legally resell your Tesla unless you own less than 10% interest in it.

 Are Teslas safe?

There were reports of accidents involving Tesla owners. Some people reported having problems with the autopilot feature. Autopilot mode uses cameras, radar sensors, and GPS systems to keep track of objects ahead and adjusts speed accordingly. 8) Will Tesla ever become a household name?

It already is. According to a Consumer Reports survey, Tesla ranks number 1 among the most reliable brands.

Should I buy Tesla stock?

If you think Tesla is going places then sure why not. Just remember that success takes time. Even Apple took almost 20 years to reach its current level of popularity.


Bottom Line

If you are looking for ways to invest then Tesla stocks could be a good option. It offers great potential for long-term growth. Moreover, its price-to-earnings ratio is currently at 17 which makes it cheap relative to earnings. If you believe in Elon Musk's vision, then investing in his company will pay off handsomely over time.