You don’t have to be an athlete to wear Nike products – the company is well known. That, combined with a track record of strong performance, is enough to have many investors wondering how to buy Nike shares, which trade under the symbol NKE.
Ready to put your money where your feet are? Here’s how to buy Nike stock.
1. Look for Nike stocks
Maybe you’ve been wearing Nike Air since you were a teenager or you wear Nike workout gear to the gym every day. You know the brand, but that doesn’t mean you know the company or the type of details you should evaluate before buying Nike stock.
Before you buy stocks, you should delve into company and industry fundamentals. This means researching Nike’s management team, revenue, net revenue, and profit, as well as expectations and anticipated challenges for the company and the sportswear industry as a whole. Consider not only what could go well for Nike in the months and years to come, but also what could go wrong and how it could affect the company’s stock price.
Even the most thorough research won’t predict the future of Nike – or any other company – but it will help you make an informed decision about whether the stock deserves a place in your portfolio.
2. Set a budget for Nike stocks
Individual stocks — even those of established growth companies like Nike — are riskier than diversified investments like index funds.
Why? Because index funds track a stock index and hold shares in many, often hundreds, of companies, rather than just one. Over time, the companies within an index fund that are successful will outweigh those that are not, making you less likely to lose your investment.
That’s not to say you can’t also choose individual companies to invest in, like Nike. But when you do, you might consider following a few basic rules:
Limit individual stocks to 10% of your overall portfolio. The rest can be made up of low-cost index funds for easy diversification.
Do not invest short-term money. Investing for retirement in 20 years? Great. Are you investing in a house that you want to buy next year? Put on the brakes. As a general rule, you should never invest the money you will need for the next five years. With a short-term horizon, you’re more likely to have to sell at a loss because you won’t have time to bounce back from market swings.
Following these two general rules, set a budget for how much you want to invest in Nike. It’s fine, and even wise, to start small with one or two stocks; you can always increase your investment over time.
3. Open a brokerage account
If you’re new to this game, you might not realize that you need a brokerage account to buy stocks, including Nike stocks. If you don’t already have one, the opening process is quick and painless. (We have a step by step guide to brokerage accounts here.)
Biggest hurdle: Deciding where to host your account. There are many competent brokers competing for your money. To narrow down options, consider trading commissions, account minimums, fees, and investment selection. (Yes, you have your sights set on Nike. But that doesn’t mean you won’t want to diversify — or take our advice on stocking your portfolio with index funds — later.)
Once you have selected a broker, you can fund your account via wire transfer from a bank or savings account.
4. Buy Nike Stock
With your brokerage account open, operational, and funded, you can use the broker’s online trading platform to buy Nike stock.
To do this, look on the website of the broker NKE, which is the stock symbol of Nike, for the code used to identify it on the stock exchange. (Now’s not the time to make typos, so make sure you typed it in correctly.) Nike’s stock quote should appear, along with a buy button. Click on it and an order ticket will load.
In the order ticket, you will be able to specify the number of shares you wish to buy and choose an order type.
Don’t get bogged down by command type options – for most people it’s good to focus on two:
A market order tells the broker to buy Nike stock as soon as possible. The stock price may differ from the price you see in your order form because a market order prioritizes speed over price. The goal is to execute the command immediately.
A limit order prioritizes price over speed: it tells your broker to place your order for Nike stock only if you can buy the stock at or below the price you dictate. You will fill in the limit price as part of the trade ticket. A limit order protects you against wild swings in a stock’s price, but it also means that the order may not be filled if your price is not met.
Your broker will let you know when your order is placed, when you will be a shareholder of Nike. Even better: you can follow all of the advice above to buy shares of other companies, adding to and diversifying your portfolio. For more tips, check out our comprehensive guide to how to buy stocks.
Disclosure: The author held no position in the above investments at the time of initial publication.