Tesla is a car company that is listed in the stock market as TSLA. If you are buying the Tesla stock, you need to be comfortable with fluctuations. This is because of the fact that the sudden up and down share price swinging is a common occurrence. This is not only attributed to the company issuing 5 for 1 stock splits since August 31, 2020, but also because the share price reduced to $400 per share compared to the share pre-split of $2213.40. The company is currently trading at approximately $700 per share.
Pros And Cons Of Buying Tesla Stock
Buying the TSLA stocks might be risky if you invest in a high valuation. You have to assess the risk tolerance of your investment before buying the shares. As an investor who has high-risk tolerance, you might need to hold your stock for a long period while waiting for volatility. If you want to have a diverse investment portfolio, you might need to reduce the investment in Tesla so that you do not outsize your other investments in your portfolio.
The decision to invest in Tesla means that you have a lot of faith in the company’s performance now and in the future. You have to consider quantitative and qualitative factors before determining if Tesla shares are worth investing in. Before purchasing equity, you need to look at things like Tesla’s management, total revenue, competition, and risk. If you have confidence in the CEO, company’s vision, future, and current business decisions, you can invest.
How Much You Should Invest In Tesla
Part of the decision is dictated by how much money you can invest. But before buying the TSLA shares, you should also consider the percentage of your portfolio that you need to tie to Tesla. You have to consider the company’s performance before buying shares and where you have set your financial goals.
You should prioritize an emergency fund. Financial experts advise people to have 6-12 months’ worth of investments. However, even $1000 is a good start. You should not invest your emergency fund in a stock like Tesla. You can invest in a high-yielding savings account where you can access the money and it is secure instead of riding the TSLA train.
You also need to know when you expect to use the money you have spent investing in the Tesla shares. Generally, you should have a timeframe when investing in any shares. So, if you consider buying Tesla shares as a long-term investment, you should invest money you do not need soon.
According to the experts at Money Morning, the Tesla stock price prediction for 2025 might come as a shocker to many. Although Tesla has penetrated many markets, the stock might not perform well if it does not do the following things.
● Invest in Robo-taxis. If Tesla invests in taxis, it could double revenue generation by 2025
● They need to renew their insurance that is due in 4 years.
● Compete with new electric car makers and growing competition from top car makers like Volkswagen Group and General Motors
● They also need to penetrate China’s market by convincing Beijing that they are not selling data to America.
TSLA Investment Overall
Investing in Tesla with Elon Musk at the helm is usually like riding a rollercoaster. It has its ups and downs and thrills but you need to determine if it's right for your investor portfolio.
