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During the early pandemic days, Peloton emerged as a leading option for home workouts. However, its stock, which peaked at $224.05 ($167.42 USD) in January 2021, has since dropped over 96%, now trading around $8.30 ($6.20 USD).
If you’re considering investing in Peloton, here’s a guide on how to buy its stock:
How to Buy Peloton (PTON) Stock
- Choose a Broker To purchase Peloton stock, open an account with a brokerage. Look for providers with low fees and minimums. Review the types of accounts offered, such as taxable accounts and registered accounts like the Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). RRSPs are recognized by the IRS for tax deferral on U.S. dividends, avoiding the 15% withholding tax.
- Do Your Research Before investing, research Peloton’s operations, financial health, goals, and risks. Check annual and quarterly reports filed with the U.S. Securities and Exchange Commission (SEC) for detailed insights.
- Determine Your Investment Amount Decide how much to invest by considering:
- Budget: Ensure all essential expenses, savings, and emergency funds are covered before investing.
- Investment Strategy: Choose between a lump-sum investment or dollar-cost averaging, which involves buying shares gradually over time to manage risk.
- Portfolio: Evaluate how Peloton fits into your overall investment strategy and ensure it complements other holdings.
- Place Your Order Log into your brokerage account and enter Peloton’s ticker symbol (PTON) along with the number of shares or dollar amount you wish to invest. You can choose between:
- Market Orders: Buy at the current market price.
- Limit Orders: Buy only if the stock reaches a specific price.
Peloton is traded on the Nasdaq, with standard trading hours from 9:30 a.m. to 4:00 p.m. ET. Some brokers may offer extended trading hours.
- Manage Currency Conversion Fees Canadian investors will face currency conversion fees of 1% to 4% when buying U.S. stocks. To minimize these fees, consider:
- Using a U.S. Dollar Account: Keep funds in U.S. dollars to avoid conversion fees.
- Norbert’s Gambit: Buy and convert Canadian shares to U.S. shares through a process called “journaling over” to bypass conversion fees.
- Sell Your Peloton Stock To sell, log into your trading platform, enter the ticker symbol, and specify the number of shares or dollar amount. Choose between market and limit orders based on your preferences. If significant gains are realized, consult a tax professional to optimize your tax strategy.
As a Canadian, capital gains tax is generally owed to the CRA, not the IRS, except in specific cases like holding a significant stake in U.S. real estate corporations or earning over $5 million USD from U.S. investments.
Other Ways to Invest in Peloton
Investing in individual stocks like Peloton can be risky due to potential price volatility. Consider diversifying your investment strategy to manage risk effectively.
