The Walt Disney Company is a worldwide entertainment giant that owns theme parks, movie studios, television networks, streaming platforms, and more. If you want to buy a piece of the magic kingdom, here’s what you need to know.
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How To Buy Disney Stock
Step 1: Decide Between a Brokerage or Direct Stock Purchase Plan
Online brokerage: A brokerage account allows you to buy and sell stocks, including Disney. It serves as your intermediary to the stock market and processes trades for you. If you don’t have a brokerage account yet, look for a broker with low investment minimums and trading fees. There are several online brokers that provide these services. Check out our list of the best online brokers.
Direct stock purchase plan: Disney and many other public companies offer a direct stock purchase plan. With this approach, you fill out an enrollment form and purchase Disney stock directly from the company. You must make an initial investment to open an account, typically a minimum of $200, or authorize monthly deductions of at least $50 for four consecutive months. Once you become a shareholder, you can buy and sell shares through Disney’s investor center.
While the direct stock purchase plan offers the convenience of buying shares directly from Disney, a brokerage account generally provides more flexibility. It allows you to buy and sell shares of multiple companies, not just Disney, and gives you greater control over pricing and orders. It’s important to note that Disney’s stock certificate program, which allowed shareholders to receive a tangible certificate featuring Disney characters, was suspended in October 2021.
Step 2: Choosing the Right Account
If you opt for a broker, you can choose from different account options based on your long-term plans:
Individual retirement account (IRA): If you want to save for retirement, opening an IRA can provide tax advantages. However, keep in mind that early withdrawals before the age of 59 ½ may incur a 10% penalty fee, plus income taxes.
Taxable brokerage account: These accounts are suitable for shorter-term investment goals or if you’ve maxed out your tax-deductible IRA contributions. While they lack the tax benefits of IRAs, you can withdraw funds at any time, offering additional flexibility.
Consider your long-term investment goals and consult with a financial advisor to determine the best account type for you.
Step 3: Factors to Consider Before Investing in Disney
Before investing in Disney stock, it’s crucial to assess whether it aligns with your investment strategy. While Disney is a blue-chip stock with a proven track record, there are a few factors worth considering:
Disney’s financials: Review Disney’s annual reports and quarterly filings to understand the company’s performance, goals, competitors, and potential risks. These reports can be found on Disney’s investor relations page.
Portfolio diversification: While Disney is a well-known company, all investments carry some level of risk. Ensure your finances are in good shape before investing and diversify your portfolio by investing in multiple companies.
Step 4: Buying and Selling Disney Stock
To buy and sell shares of Disney, follow these steps:
- Log on to your online brokerage account.
- Enter Disney’s ticker symbol, which is DIS.
- Specify the number of shares or the amount of money you want to invest.
- Choose the type of order you want to make. Market orders complete transactions immediately at the existing price, while limit orders go through once the stock reaches a price you specify.
Disney is traded on the New York Stock Exchange (NYSE), and trading occurs from Monday to Friday between 9:30 a.m. and 4:00 p.m. ET. Some brokerage platforms also allow pre-market and after-market trading.
Selling Disney Stock
When you want to sell Disney stock, follow these steps:
- Log on to your online brokerage account.
- Enter Disney’s ticker symbol (DIS) and the number of shares you want to sell.
- Choose whether to use market or limit orders when selling stocks. Market orders execute the transaction immediately at the prevailing market price, while limit orders only execute when the stock reaches a specific price you set.
Whether you plan to sell your Disney stock in retirement or earlier, it’s essential to proceed with caution. Selling stock at a profit may incur capital gains taxes, so consult with a tax professional to understand your tax obligations and minimize your tax bill. On the other hand, selling at a loss may have tax benefits.
Other Investment Options
Investing in single stocks, even well-known blue-chip companies like Disney, carries inherent risks. To lower your risk and achieve greater diversification, consider the following options:
- Mutual funds: Mutual funds consist of hundreds or even thousands of stocks, providing you with a ready-made portfolio with a single purchase. Many funds include Disney as one of their holdings.
- Exchange-traded funds (ETFs): Similar to mutual funds, ETFs offer diversification by comprising multiple stocks. Some ETFs specifically target the communications sector, which includes Disney.
By diversifying your portfolio through mutual funds or ETFs, you can mitigate the risks associated with individual stock investments.
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