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How to Buy Meta Platforms (formerly Facebook) Stock
- Open a Brokerage Account
To purchase Meta stock, a brokerage account is necessary. Brokerages vary in services, fees, and available investment options, so it’s beneficial to compare them to find the best fit for your needs. Explore options to find a suitable brokerage.
- Choose an Account Type
Select an account type based on your investment objectives:
- Retirement Accounts: Registered Retirement Savings Plans (RRSPs) offer tax benefits but come with withdrawal restrictions and annual contribution limits.
- Taxable Accounts: These accounts provide flexibility with no special tax advantages. You can contribute and withdraw funds at any time without restrictions, making them suitable for general wealth-building.
- Determine Your Investment Amount
Consider these factors when deciding how much to invest in Meta:
- Budget: Ensure that you have allocated funds for essential expenses, retirement savings, and an emergency fund before investing.
- Current Price: Meta's share price fluctuates. You can purchase whole shares or fractional shares if available through your brokerage.
- Investment Strategy: Decide whether to buy Meta stock in a lump sum or use dollar-cost averaging to invest a set amount regularly, which can help mitigate the impact of price volatility.
- Portfolio Fit: Evaluate how Meta fits into your overall investment strategy and diversification goals. Ensure your portfolio is balanced across different sectors and company sizes.
- Select Your Order Type and Execute the Trade
You can choose from different order types when buying Meta stock:
- Market Orders: Buy shares at the current market price.
- Limit Orders: Buy shares only when the price reaches a specified level.
- Stop Orders: Execute a buy order once the stock hits a certain price.
Meta trades on the Nasdaq stock exchange between 9:30 a.m. and 4:00 p.m. ET, Monday through Friday. Pre-market trading is available from 4:00 a.m. to 9:30 a.m. ET, and after-hours trading runs from 4:00 p.m. to 8:00 p.m. ET, depending on your brokerage.
- Consider Currency Conversion Fees and Taxes
If buying Meta stock from Canada, be aware of potential currency conversion fees. To minimize these fees, you can:
- Use a U.S. Dollar Bank Account: Keep funds in U.S. dollars to avoid conversion fees.
- Perform Norbert’s Gambit: Buy interlisted stocks or ETFs on Canadian exchanges, convert them to U.S. dollars through a "journal over" process, and then purchase Meta stock in U.S. dollars.
For taxes, you’ll be subject to a 15% withholding tax on U.S. dividends. If Meta stock is held in an RRSP, you won’t be taxed by the IRS. However, Canadian capital gains taxes apply, with only 50% of the gains subject to taxation. If your U.S. investments exceed $5 million USD, estate taxes may apply upon your death.
- Monitor Meta’s Performance
Regularly review Meta's performance by:
- Checking Annualized Returns: Compare Meta’s performance against benchmarks like the Nasdaq 100 or S&P 500.
- Reviewing Financial Reports: Meta files Form 10-K annual reports and Form 10-Q quarterly reports, available on its investor relations site or the U.S. SEC database.
- Consulting Expert Analysis: Use resources like Globe Investor for expert insights to better understand Meta's performance and investment suitability.
When deciding to sell Meta stock, the process is similar to buying: access your brokerage account, enter the number of shares or dollar value to sell, and choose your order type. As a Canadian investor, capital gains taxes apply, with exceptions for specific conditions related to U.S. real estate and estate taxes if applicable.
