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The General Electric Co. (GE) is a leading U.S. industrial stock that runs global manufacturing operations in the areas of aviation, health care, renewable energy and power generation.
While it has been a leading U.S. corporation for nearly a century, GE recently announced a new strategy to split into three independent companies: One specializing in health care, another in renewable energy and power, and an aviation company.
If you’re excited about GE’s future and want to learn how to invest in GE stock, here’s what you need to know.
How to Buy General Electric Stock
1. Do Your Homework
Before using your hard-earned cash to invest in GE, do some research to ensure you’re comfortable with the company’s management and current strategy.
Like every public company, GE is required to submit annual and quarterly reports to the Securities and Exchange Commission (SEC)—you can view these documents on the company’s investor relations page.
Other useful resources for researching stocks include expert analyses from Fidelity or Morningstar. You can use financial information on GE and expert recommendations to tailor an investment strategy to your needs.
2. Choose an Investing Platform
If you don’t have one already, you need to open an account on an investing platform to buy shares of individual stocks like GE. These platforms also let you buy a wide selection of other investment assets like bonds, exchange-traded funds (ETFs) and mutual funds.
- Online brokers. If you’re interested in taking an active role in managing your investments, an online brokerage account allows more self-directed access to your portfolio.
- Investment apps. These apps are best for people who are just starting out on their investing journey and want to learn more about markets. Some give you self-directed investing tools for a more hands-on approach, while others offer services that are more like robo-advisors.
- Robo-advisors. These are automated management platforms that take charge of your investing portfolio. Some robo-advisors are free, but the best charge annual management fees and offer access to financial advisors. Not all robo-advisors let you buy shares of individual stocks.
- Full-service brokers. Park your investment decisions in a fully managed account if you want the highest level of advice. This option typically comes with a full range of services—like estate and retirement planning—as well as investment advice. Fees will likely be the highest if you opt for this route.
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3. Pick the Right Account Type for Your Goals
Depending on the platform you choose for investing, you’ll have several different account options to pick from. Consider your long-term goals before deciding which account to open:
- Retirement accounts. Individual retirement accounts (IRAs) provide you with various tax benefits when you invest in retirement. SEP IRAs and traditional IRAs offer tax deductions for your contributions, while Roth IRAs offer tax-free withdrawals. They also have annual contribution limits.
- Taxable brokerage accounts. These are better options when investing in short-term goals. Your returns are generally subject to capital gains taxes, but there are no annual contribution limits and you can take your money out whenever you wish.
4. Decide How Much Money to Invest in GE
Once you have a brokerage account, you can decide on an investment budget. When thinking about how much to invest in GE or other companies, ask yourself the following questions:
- Do I have an emergency fund? The stock market can be volatile, so you should only invest after you have established an emergency fund and are sure you can comfortably afford your other bills.
- When do I need this money? In general, money that you need to access in one to five years shouldn’t be invested in stocks. The risk of losing cash and needing that money before it can rebound is too great. When investing in the stock market, you should only invest money in stocks if you have five years or more before you need to access the cash.
- How does GE fit into my portfolio? No matter what your investment goals are, investing in only one company is never a good idea. To protect yourself against market changes and reduce the risk of losing money, you need to build a diversified portfolio and invest in many stocks and industries. Before investing in GE, think about how it fits in with your other investments in your existing portfolio.
- What’s the current stock price? As of October 2022, GE’s stock price was more than $60 per share. Some brokers allow you to buy fractional shares—partial slices of individual stocks—but not all do, so you may need to invest enough money to cover the cost of a full share.
5. Place an Order
Once you have a good grasp on how much money you want to invest in GE, you can place your first stick order. Log into your brokerage account and enter the company’s ticker symbol—GE—and the number of shares you want to buy or the dollar amount you want to invest.
You can usually choose an order type when buying stocks. The simplest option is a market order, where the order goes through at the current price. However, you can also use a stop order or limit order to buy when GE stock reaches a certain price.
GE is traded on the New York Stock Exchange (NYSE). The NYSE’s core trading session is Monday through Friday from 9:30 a.m. to 4:00 p.m. (EST).
5. Monitor Your Portfolio’s Performance
After buying GE stock, check on its performance on a regular basis — such as quarterly or annually — and see how it compares to the broader market. Using a benchmark like the or the Dow Jones Industrial Average (DJIA) is a good way to see how your portfolio stacks up to the overall market.
How to Sell GE Stock
Selling GE stock is a straightforward process. Enter your brokerage account’s trading platform and type in the ticker symbol and the dollar amount or number of shares you want to sell. You can decide to sell at its current price, or you can opt to sell when it reaches a particular point.
Selling stock at a profit may incur capital gains taxes. Before selling any stock, consider meeting with a tax professional to discuss how to limit your tax liabilities.
How to Invest in General Electric With Index Funds
Investing in individual stocks isn’t a good idea for every investor. Novice investors and those that are more hands-off in regards to investing may benefit from investing in index funds instead.
Index funds are passively managed funds that aim to mimic the performance of a financial index, such as the S&P 500. Index funds can include all of the companies in an index, or they may invest in a representative sample of stocks. Investing in index funds allows you to get exposure to companies like GE, but they also give you exposure to hundreds of other companies at once, diversifying your portfolio.
As a major corporation, many index funds include GE in their holdings. In fact, there are more than 170 exchange-traded funds (ETFs) with GE shares. The biggest holder is the SPDR S&P 500 Trust (SPY), while the ETF with the largest allocation to GE stock is the Capital Group Dividend Value ETF (CGDV).
