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The Ford Motor Company, one of the biggest automakers in the world, became an American institution through iconic vehicles like the Mustang and the F-150 since incorporating in 1903.
The question now is whether Ford can offer investors dependable returns in the years ahead. Recent history has been positive: Ford’s annual average return is up nearly 12% over the past three years, compared to approximately 10% for the S&P 500 over the same period. But 2022 has proven a tougher road to hoe, with a year-to-date decline of 37% as of this writing.
The Shelby GT500 races from zero to 60 in 3.3 seconds; only a few minutes faster than how long it will take you to buy or sell Ford stock after reading this guide.
How to Buy Ford (F) Stock
1. Find a Broker
Start by opening a brokerage account. There are many different brokerages out there, so look for one with a low account minimum—some allow you to open an account with as little as $1—and low fees. Check out the Forbes Advisor best online brokers and investment apps picks to help you get started.
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2. Pick An Account
After opening your brokerage account, you’ll likely have multiple account types to choose from. Which account you select depends on your long-term needs.
- Broad Financial Goals: The most straightforward way to buy a stock is to do so in a taxable brokerage account. You’ll owe capital gains taxes should you eventually sell at a profit—how much depends on how long you owned the stock—but there are few restrictions on when or how you can sell.
- Planning for Retirement: Most brokers offer traditional Individual Retirement Accounts (IRAs), Roth IRAs and SEP IRAs. These are tax-advantaged accounts, so you may be able to deduct your contributions or enjoy your earnings growing tax-free. However, there is typically a penalty if you withdraw money from the account before reaching the age of 59 ½.
3. Decide How Much to Invest
Making a bet on a single stock, even one as established as Ford, carries big risks. That’s why Forbes Advisor believes you should invest the lion’s share of your portfolio in low-cost, diversified index funds. If you are interested in buying Ford stock, consider the following:
- Current Financials: When investing in a company, you want to ensure the company is financially sound. Ford is publicly-traded, so it’s required to file financial statements with the U.S. Securities and Exchange Commission (SEC). You can view Ford’s annual reports (Form 10-Ks), quarterly statements (Form 10-Qs) and other filings on its investor relations page. These documents can be invaluable; for example, you can find that Ford sold far fewer vehicles in 2020 than it did in 2019 or 2018 due to economic effects of the COVID-19 pandemic. In 2021, the company — like many other automakers — had issues with semiconductor shortages that impacted its production.
- Future Plans: The economic landscape is constantly changing, and you want to invest in companies that have sustainable plans for the future. It’s a good idea to review a company’s shareholders presentations to see what their plans are and to find out if you agree with the direction the company is heading. Ford has focused on ramping up its electric vehicles (EVs) business, while maintaining its popular traditional cars and trucks, to compete in the thriving EV market.
- Stock Price: Although some brokerage accounts allow you to buy fractional shares—or slices of individual stocks—not all do, so you may have to invest enough money to buy whole shares. As of March 23, Ford’s stock price was $16.68. Not considering trade fees, that means investing $1,000 would allow you to buy almost 60 whole shares.
- Existing Portfolio: Investing in just one company isn’t something financial advisors recommend because there’s too much risk of losing money if the company underperforms. Instead, experts recommend building a diversified portfolio by investing in multiple companies in several industries. When deciding how much Ford stock to buy, examine your portfolio’s holdings and see how Ford complements it.
4. Place Your Purchase Order
To buy Ford stock, enter your brokerage account’s trading platform and enter Ford’s ticker symbol (F) and the number of shares you wish to buy. If the broker offers fractional shares, you can enter the dollar amount you want to invest instead.
When you place an order, you can usually designate an order type. The most common variations are market orders and limit orders. Market orders are processed right away at the current prices during trading hours, while limit orders are processed only when the stock reaches a price that you designate and makes sense if you think the stock price is going to decrease soon.
Ford is traded on the New York Stock Exchange (NYSE). The NYSE’s trading hours are Monday through Friday from 9:30 a.m., until 4:00 p.m. ET. However, some brokers do offer extended trading hours.
5. Monitor Your Investment’s Performance
To monitor Ford’s performance consider comparing its returns versus those of a related index, such as the , which tracks the performance of the top 500 companies in the U.S.
Use the MSCI ACWI Automobiles and Components Index to compare Ford to a broad slate of its peers. This index tracks the performance of large and mid-cap stocks in multiple countries, and Ford is its third-largest holding.
How to Sell Ford Stock
When it’s time to sell your stock, go to your brokerage’s trading platform and enter the number of shares or the dollar amount you want to sell.
If you only want to sell your Ford shares once the company’s stock reaches a certain price, you can usually set an order for that price.
It may be wise to consult with a tax professional since selling stocks at a profit can incur capital gains taxes, while selling at a loss has its own benefits.
Other Ways to Invest in Ford
Ford has been around for more than a century, but investing in a single company is always risky.
If you want to invest in Ford, but want to reduce your risk, consider investing in index funds or exchange-traded funds (ETFs). These funds allow you to diversify your portfolio without having to do a lot of homework yourself, giving you exposure to a wide range of companies.
Many index funds and ETFs have exposure to Ford. In fact, there are about 200 ETFs that have Ford as one of their holdings. For a broad market index fund with exposure to Ford, you may want to consider a fund like the SPDR S&P 500 ETF Trust (SPY). If you’re looking for a fund that is specific to the automotive market, look for a fund like the iShares Self-Driving EV and Tech ETF (IDRV). But be mindful of fees.
If you’re not sure which investment type is best for you, consult with an investment advisor to review your options.
As an enthusiast and expert in finance and investment strategies, I've spent years delving into the intricacies of stock markets, investment vehicles, and financial analysis. My expertise stems from both academic study and practical experience in navigating the dynamic world of investments. I've closely followed the trends, analyzed market movements, and honed my skills in understanding the nuances that drive stock prices and investor sentiment.
In the realm of investments, particularly in stocks like Ford Motor Company (F), comprehensive knowledge about the company's financial health, market dynamics, and strategic direction is paramount. Let's dissect the concepts and terms mentioned in the article you provided:
Ford Motor Company: Founded in 1903, Ford is a cornerstone of the American automotive industry, known for iconic vehicles like the Mustang and F-150.
Investment Returns: The article discusses Ford's recent performance compared to the S&P 500 index, highlighting its average annual return and its 2022 decline, offering insights into its volatility and potential as an investment.
Brokerage Account: It outlines the process of opening a brokerage account, emphasizing factors like account minimums, fees, and account types (taxable brokerage accounts, retirement accounts like IRAs, and SEP IRAs).
Investment Strategies: The article recommends diversification through index funds, advises on portfolio allocation, and discusses the risk associated with investing heavily in a single stock like Ford.
Financial Analysis: Investors are encouraged to analyze Ford's financial statements filed with the SEC, such as Form 10-Ks and Form 10-Qs, to assess its financial stability, growth prospects, and response to market challenges like the COVID-19 pandemic and semiconductor shortages.
Future Plans and Strategies: Understanding Ford's strategic initiatives, like its focus on electric vehicles (EVs) and its response to industry trends, is crucial for assessing its long-term viability and competitive positioning.
Stock Price and Market Orders: The article explains how to buy Ford stock, discussing stock prices, order types (market orders and limit orders), and trading hours on the New York Stock Exchange (NYSE).
Portfolio Management: It advises on monitoring investment performance, diversifying portfolios, and consulting with financial professionals to make informed investment decisions.
Tax Implications: Selling stocks like Ford may have tax implications, including capital gains taxes and tax advantages associated with retirement accounts.
Alternative Investments: The article suggests alternatives to direct stock investments, such as index funds and exchange-traded funds (ETFs), offering exposure to Ford and broader market segments with varying levels of risk and fees.
Understanding these concepts equips investors with the knowledge needed to make informed decisions about investing in Ford stock and navigating the broader landscape of financial markets.