Zoom has become one of the go-to platforms for virtual meetings. Here are the steps for how to invest in Zoom stock with as little as $100.
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Introduction – Why Invest in Zoom?
Zoom Video Communications was founded in 2011 by Eric Yuan, a former Cisco engineer. Zoom is a leading platform for virtual video conferencing. Demand for the platform – and subsequently, the stock price – has soared in 2020 from the “new normal” of many people working from home due to COVID-19. The stock dropped after recent, potentially exciting news from Pfizer regarding a vaccine candidate, presenting a buying opportunity.
Remember that Zoom was a popular product before the global pandemic, and it will still be popular in a post-COVID-19 world. These trying times in 2020 have established a new workplace for many employees who may never return to an office, for whom Zoom will continue to be a necessary tool in the future. Many employers will also likely prefer to keep employees at home to cut costs and improve efficiency and productivity.
The company also recently introduced “OnZoom” – a new product that is a virtual event platform with paid admission – at its ZoomTopia conference in October 2020. Zoom also has applications for socializing virtually between friends and family, distance learning for students, tele-medicine, and more broad avenues outside of strictly being a conference call solution for office workers. Video calling is here to stay, and it is clear that Zoom will continue to be a major aspect of the everyday lives of many people post-pandemic.
As we'd expect, Zoom has crushed earnings expectations in recent months.
Zoom stock has far outpaced the broader market since it went public in May 2019:
How to Buy Zoom Stock
First, you'll need an account with a stock broker if you don't already have one. This is an online platform through which you'll access stocks. My choice is M1 Finance. M1 has zero fees and zero trade commissions, and offers automatic rebalancing, fractional shares, and a sleek, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.
At the time of writing, a single share of Zoom stock is just north of $400. Fractional shares allow you to use M1's account minimum deposit ($100) to buy roughly 1/4 of a single share of Zoom, allowing every penny to go to work for you. After the initial $100 deposit when opening a new account, you can buy new fractional shares of stock in the future whenever your cash balance reaches at least $25, allowing your position to grow with more fractional shares as your stock position grows or as you deposit more cash into your account. This makes the compounding happen faster, allowing your investments to grow more quickly.
Opening an account with a brokerage only takes about 10 minutes. After that you can connect your bank account to deposit money into your investment account. Then just type in what's called the ticker symbol – the unique identifying abbreviation for the stock – for Zoom (ZM) and place the buy order with just a few clicks. It's that simple! You can obviously buy Zoom alongside other stocks in your portfolio to diversify, or just invest entirely in Zoom if you want to.
Assess how holding Zoom stock fits inside your larger portfolio. If your portfolio is lacking technology stocks – particularly cloud-based videoconferencing – then Zoom can be a great addition.
How To Invest in Zoom Stock – Quick Steps
- Sign up for a new account with an online brokerage like M1 Finance.
- Connect your bank and fund your brokerage account.
- Enter the ticker symbol – ZM – or the company name to locate the stock.
- Place the buy order. You're done! You can now call yourself a Zoom shareholder.
Disclaimer: While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.
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