Pfizer, a global pharmaceutical giant, has garnered significant attention in recent times, largely due to its pivotal role in developing a COVID-19 vaccine. With Pfizer’s stock showing impressive growth in the past year, many investors are considering adding it to their portfolios.
If you’re among those intrigued by Pfizer’s performance and potential, this comprehensive guide will walk you through the process of buying Pfizer (PFE) stock. In addition, we’ll explore how to sell your Pfizer shares and discuss alternative investment options that allow you to tap into Pfizer’s success.
How to Buy Pfizer (PFE) Stock
Investing in individual stocks like Pfizer can be an exciting and potentially profitable venture. Here’s a step-by-step guide to help you navigate the process:
1. Research Pfizer
Before diving into any investment, it’s crucial to do your homework. Start by thoroughly researching Pfizer. Analyze Pfizer’s financial performance, company structure, and future prospects. Consider potential competitive threats.
Access Pfizer’s annual and quarterly reports, which are readily available on its investor relations website or the Securities and Exchange Commission (SEC) database.
Notable highlights: In 2021, Pfizer reported impressive full-year revenues of $81.3 billion, thanks in large part to its COVID-19-related products. The Comirnaty vaccine and Paxlovid antiviral pill are expected to contribute significantly to the company’s 2022 revenues.
2. Choose a Brokerage
To buy Pfizer stock or any other stock, you need a brokerage account. A brokerage acts as the intermediary that facilitates the purchase and sale of securities like stocks and bonds.
Look for an online brokerage that suits your needs. Consider factors like trading fees, investment minimums, and the user-friendliness of the platform.
Not sure where to start? Explore our recommended list of the best online brokers to simplify your decision.
3. Choose an Account:
Most brokerages offer various account options. Select the one that aligns with your financial goals and tax preferences.
If you’re saving for retirement, consider opening an Individual Retirement Account (IRA), such as a traditional IRA, Roth IRA, or SEP IRA. These accounts offer potential tax advantages, such as tax deductions or tax-free withdrawals after retirement.
If your investment aims are more flexible and not tied to retirement, you can opt for a taxable investment account. While it lacks tax benefits, it provides you with unrestricted access to your money.
4. Determine Your Investment Amount
Before making a purchase, evaluate your financial situation. Ensure that you prioritize essentials like budgeting, building an emergency fund, and contributing to your retirement savings.
Decide how much you can comfortably invest in Pfizer stock without compromising your financial stability.
When determining your investment amount, consider the following factors:
- Take care of your budget, bills, and essential expenses first.
- Set aside funds for your retirement savings.
- Allocate the remaining funds for investments, such as Pfizer stock.
Choose your investment strategy: You can either invest a lump sum or use dollar-cost averaging, where you purchase shares at regular intervals to potentially lower your risk.
5. Place an Order for Pfizer
Once you have your brokerage account set up and funds ready, it’s time to buy Pfizer shares.
- Log in to your brokerage account and search for Pfizer’s stock symbol, “PFE.”
- Enter the number of Pfizer shares you want to purchase or a specific dollar amount if your platform supports fractional shares.
- When buying shares of stock, you typically have two common order types to choose from:
- Market orders: These are executed immediately at the current market price.
- Limit orders: These are processed only when the stock reaches a specific price that you set. Limit orders can be useful if you anticipate price changes.
- Note that Pfizer is traded on the New York Stock Exchange (NYSE), with trading hours from Monday to Friday, 9:30 a.m. to 4:00 p.m. EST. Some brokerage platforms also offer after-hours trading.
How to Sell Pfizer Stock
Eventually, you may decide to sell your Pfizer shares. Here’s how to go about it:
- Access your brokerage platform and log in.
- Navigate to the option to sell or trade stocks.
- Enter the number of Pfizer shares you want to sell and specify Pfizer’s ticker symbol, “PFE.”
- Choose to sell at the current market price or set a minimum sales price (limit order).
- Confirm the sale transaction.
If your Pfizer investment has appreciated significantly, consider consulting a tax professional, such as a Certified Public Accountant (CPA), before selling. Capital gains taxes may apply, and a CPA can help you navigate tax implications and explore strategies to minimize your tax liability.
Other Investment Options
While investing in individual stocks can be rewarding, it also carries risks, as a single company’s performance can be volatile. Pfizer, despite its success, is no exception. To mitigate risk and diversify your investment portfolio, consider these alternative options for gaining exposure to Pfizer’s success:
- Mutual Funds: Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks and other securities. Some mutual funds include Pfizer among their holdings, providing you with instant diversification.
- Exchange-Traded Funds (ETFs): ETFs are similar to mutual funds but are traded like stocks on stock exchanges. Many ETFs include Pfizer in their portfolios, allowing you to invest in a broad range of companies, including Pfizer, with a single purchase.
- Sector-Specific ETFs: If you want to focus specifically on the pharmaceutical or healthcare sector, consider sector-specific ETFs that include Pfizer and other relevant companies in their holdings.
- Index Funds: Index funds aim to replicate the performance of a specific stock market index, such as the S&P 500. Some index funds include Pfizer as one of their constituent stocks, providing exposure to Pfizer’s performance alongside other major companies.
- Diversified Funds: For a well-rounded and diversified investment, consider funds like the Vanguard Total Stock Market Index Fund (VTSAX), which invests in a wide range of companies across various sectors, including Pfizer.
Diversifying your investments through mutual funds, ETFs, or index funds can help spread risk and reduce the impact of any single stock’s performance on your overall portfolio. Remember that each investment option has its own set of pros and cons, so conduct thorough research and consult with a financial advisor if needed to make informed decisions.
Learn more: Best Investment Options
