AMC Entertainment Holdings, Inc. (AMC) has captured the attention of both seasoned and novice investors in recent times. The company’s rollercoaster journey from the brink of bankruptcy to a meme stock frenzy and potential acquisition talks with Amazon has made it a compelling option for those looking to invest in the stock market.
In this comprehensive guide, we will walk you through the entire process of buying and selling AMC stock. In addition, we’ll explore alternative investment options for those interested in gaining exposure to AMC in a diversified manner.
Table of Contents
How to Buy AMC Stock
Step 1: Open a Brokerage Account
Before you can invest in AMC, you need to open a brokerage account. This account will serve as your gateway to the stock market. Here’s what you need to consider when choosing a brokerage:
Different brokers have varying minimum deposit requirements. Some may ask for thousands of dollars, while others allow you to start with as little as $1. Choose one that aligns with your budget and investment goals.
Many brokers offer fractional shares, enabling you to buy a portion of an AMC stock rather than the entire share. This is especially useful if AMC’s stock price is high, and you want to invest a specific dollar amount.
Brokers offer different account types, such as individual retirement accounts (IRAs) for long-term retirement savings and taxable brokerage accounts for shorter-term goals. Select the one that suits your investment horizon.
Step 2: Determine Your Investment Amount
Now that you have a brokerage account, it’s time to decide how much money you want to invest in AMC. This step requires careful consideration of several factors:
Experts often recommend diversifying your investment portfolio by spreading your funds across multiple companies and industries. Even if you believe in AMC’s potential, don’t put all your eggs in one basket.
Define your investment strategy. Are you planning to hold AMC shares for the long term, or is this a short-term play? Consider using dollar-cost averaging if you want to reduce risk by investing small amounts regularly.
Ensure your essential financial needs are covered before committing funds to investments. Address living expenses, debts, emergency savings, and retirement contributions first.
Step 3: Do Some Background Research on AMC
Before making any investment, it’s crucial to conduct thorough research on the company you’re interested in.
Examine AMC’s historical stock performance, paying attention to past highs and lows.
AMC is a publicly-traded company, so you can access its financial statements, regulatory filings, and annual reports on its investor relations page. Analyze these documents to understand the company’s financial health, future plans, and risks.
Consider the broader industry in which AMC operates. Look at trends, competitors, and factors that could impact its future, such as the rising popularity of at-home streaming services and the ongoing challenges posed by COVID-19.
Step 4: Place an Order for AMC Shares
Access Your Broker’s Trading Portal: Log in to your brokerage account and access the trading platform.
Enter AMC’s Ticker Symbol: AMC’s ticker symbol is “AMC.” Enter this symbol in the trading platform.
Choose the Number of Shares: Specify the number of AMC shares you want to purchase. If your broker offers fractional shares, you can also input the dollar amount you want to invest.
Select Order Type: You can usually choose between two order types:
- Market Order: This type of order buys the shares immediately at the current market price. Market orders are executed during regular trading hours.
- Limit Order: With a limit order, you set a specific price at which you want to buy AMC shares. The order is executed only if the stock reaches your specified price.
Check Trading Hours: AMC is traded on the New York Stock Exchange (NYSE), which operates from 9:30 a.m. to 4:00 p.m. Eastern Time on regular trading days. Some brokers offer extended trading hours, so be aware of when you can place your order.
Step 5: Have an Exit Strategy
Whether you plan to hold your AMC shares for the long term or a short period, it’s essential to have an exit strategy in place:
When you decide it’s time to sell, access your broker’s trading portal, enter AMC’s ticker symbol, and specify the number of shares you want to sell.
Selling stocks at a profit may result in capital gains taxes. Consult with a tax professional to understand your tax liabilities and explore strategies to minimize future tax bills.
Other Investment Options
If you find the idea of investing in a single stock like AMC too risky or prefer a more diversified approach, there are alternative investment options to consider:
1. Index Funds
Index funds are investment vehicles that aim to replicate the performance of a specific market index, such as the S&P 500. By investing in an index fund, you gain exposure to a broad range of companies, reducing the risk associated with holding individual stocks. Some index funds may include AMC within their holdings, allowing you to indirectly invest in the company.
2. Exchange-Traded Funds (ETFs)
ETFs are similar to index funds but are traded on stock exchanges like individual stocks. Like index funds, ETFs offer diversification by including a variety of stocks within their portfolios. Some ETFs may have AMC as part of their holdings.
3. Targeted ETFs
Targeted ETFs focus on specific sectors, themes, or strategies. They offer more targeted exposure to particular types of stocks. Some targeted ETFs, such as the SoFi Social 50 ETF (SYFY), may include AMC as one of their holdings. SYFY, for example, comprises the top 50 U.S. stocks listed on SoFi Invest, offering exposure to AMC along with other well-known companies like Tesla, Apple, and Amazon.
4. Mutual Funds
Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other assets. Mutual funds provide instant diversification across various securities. Some mutual funds may include AMC in their portfolio.
Learn more: Best Investment Options
