Buy Netflix shares
In modern realities, the topic of investment is gaining more and more attention. In the context of a global pandemic and economic instability, everyone is thinking about how to avoid depreciation of their own funds, as well as the possibility of increasing their own capital.
Innovative technologies make it possible to trade the stock market online, and the availability and ease of use of online investment platforms allows anyone with access to the Internet and a desire to understand the intricacies of the stock market to invest.
Here's how to invest in Netflix stock.
Netflix is an American provider of streaming movies and media series. The company, founded in 1997, began by renting DVDs by mail. Netflix now produces its own movies, series and television shows. It produces more than 100 TV series and movies a year and has more than 100 million paid subscribers. The company's library is available for viewing from most modern Internet browsers, as well as from smartphones, consoles and game consoles. Headquartered in California.
Today, Netflix is a global leader in online entertainment content, and Netflix shares in the period June 2016 to April 2020 showed a 373% increase.
Of course, the above figures are attractive to potential investors.
How to invest in Netflix shares?
If the classical investment model involves visiting the stock exchange, banks and the office of the company you invest in, then modern online trading is two things: choosing a reliable broker who will mediate between you and the company on the market and choosing the method of investing.
Generally, the most popular investment method today is the dividend method, when you invest a certain amount of money in the company and receive a guaranteed and pre-agreed amount of income. The amount of such a payment is determined by the shareholders' meeting and can have different amounts. Sometimes companies pay up to one third of the net profit to their shareholders. Each company has its own policy on such payments.
In the case of Netflix, we will not consider this method because the company does not pay dividends to its investors.
Through its domestic development policy, Netflix has accumulated significant debt to its investors and, in 2015, investors received additional value in the form of dividends rather than cash. The company repaid investors the dividend debt through an additional issuance of its own securities. The company's shares were "multiplied" by crushing at a ratio of 1:7. That is, for one Netflix share, the investor received 6 new shares.
Netflix's success last year gave hope for a resumption of payouts in monetary terms. Market analysts believe the company will start buying back its shares.
Today, the only relevant alternative to dividend investing is contracts for difference.
Contract for Difference, which translates into English as Contract for Difference and is shortened to CFD, is the most profitable tool in swaps, which allows you to earn quickly with minimal free money and does not tax participants with property rights. The vast majority of exchange transactions are carried out under the CFD scheme. An agreement is concluded between the parties, one of the conditions of which is an increase or decrease in the price of certain securities or other assets. When this happens, the difference between the initial price of the securities and their valuation in the future is passed on to the buyer or seller, depending on the terms of their contract. Thus, the owner's shares remain unchanged.
In this way, you can make money by predicting that the stock will go up or down. Even if the company's shares go down in price, you have the opportunity to profit, but, of course, provided you have made a bet to reduce the price.
The main difference is that when CFDs are traded, the security itself is not acquired. That is, the trader does not gain control of part of the company. On the one hand, this is a disadvantage, but on the other hand, a great advantage, as the trader does not have any obligations.
CFD trading is marginal in nature. That is, the trader receives leverage from the broker, which increases his trading potential. CFDs are considered a speculative method of investment. Despite the apparent availability of this investment method, you should remember that working with leverage carries additional risks, so make sure you understand how this trading method works. According to last year's statistics, 59.5% of retail investors' accounts suffered losses while trading CFDs.
You can invest in Netflix stock only through a broker that allows you to trade assets listed on the NASDAQ trading platform.
To choose a broker, search the Internet for a list of brokers that work online and can perform such transactions. The broker must be licensed, as well as have all documents and permits required by applicable law.
You will work through an online investment platform provided by your chosen brokerage firm.
Find out what the cost of the broker's services is. It is also not superfluous to find out about the broker's business reputation with the help of verified sources and market experts.
If a broker is selected, register on its online investment platform. Log in, go to the "promotions" section and enter a query in the search box as a ticker for the company "NFLX". The system will give you access to the platform where Netflix shares are traded.
How to buy Netflix shares?
To start trading stocks on the Internet, register on the online investment platform offered by the brokerage firm. Registration is quick and easy, it takes only a few minutes. Go to the site, click on the register button, fill in all the data on the registration form, specifying the correct e-mail address. Then follow the link that the system will automatically send you to the specified email, confirm your email and start working on the platform.
You will be asked to start with a free demo account. The system automatically credits a certain amount of fictitious funds to this account so that you can make your first test transactions without the risk of losing real money. Typically, the amount of fictitious money is $10,000 (this figure may vary on different platforms) and this amount is more than enough for training at the beginning. If it turns out that the training operations were unsuccessful and you do not have enough money, in most cases you can renew and try again.
It is difficult to overestimate the value of a demo account. It is an exact copy of the real account with the only difference being that the real account will already have your real funds. Therefore, by using a demo account, you can clearly see how the platform works: how to buy or sell shares, how to enable a feature, such as stop loss or multiplier, etc. At the same time, you do not risk your own money. Of course, you cannot withdraw money from a demo account.
To start trading for real on the platform, deposit the amount into a real account. You can do this using a bank card or any of the payment systems listed on the platform. As a general rule, the crediting of funds occurs automatically. In some cases, registration may take up to five working days. The minimum amount to top up a real account is usually $10. This makes it possible to start trading even without a large capital.
In any case, you should always remember that trading is a matter of risk, so when you are not experienced enough, start with small amounts, in order not to suffer significant financial losses in case of a failed transaction.
As a general rule, you can withdraw funds from the account in the same way as to replenish them using the same payment systems or bank card.
Is it advisable to invest in Netflix shares?
Despite all the accessibility that a modern online investment platform provides, we must not forget that investing is a complex and risky process. This is an area of activity in which you should not act blindly, because you can suffer serious financial losses. In order to invest effectively, making profits, not losses, it is not enough to study how the stock market works. It is worth remembering that the company's share price is affected by a number of external factors that must be taken into account when investing, such as the political situation in the country, foreign economic relations and the country's economic laws, the global economy, global. political trends etc. It is also worth paying attention to whether the current product or service is produced by this company, whether it plans to expand further or, on the contrary, will close down. It makes sense to follow the news about the companies you intend to invest in. At the same time, we recommend that you use only verified sources of information.
When it comes to investing in Netflix shares, global analysts' forecasts are positive.
Netflix was well prepared for the pandemic and could regularly offer its audience new products, explains The Wall Street Journal. The company creates content in advance, so unlike many competitors who were unable to make new movies because of the pandemic, the company now has more than 500 movies and series ready for release or in the final stages of production.
For the first quarter of this year, Netflix forecasts revenue growth of 23.6% year-on-year (to $7.1 billion). Regarding net earnings, the company expects growth of $1.66 billion.
So, investing in Netflix stock is a very good option.