How to Buy Pfizer (PFE) Stock – Forbes Advisor Canada

Pfizer, one of the largest pharmaceutical companies in the world, has recently gained notoriety thanks to the launch of its COVID-19 vaccine.

Over the past 12 months, Pfizer shares are up about 47%. To put this into context, consider that the benchmark S&P 500 index is up just 17% over the same period.

If Pfizer’s outstanding performance makes you want to invest your money, here’s how to buy Pfizer stock.

How to Buy Pfizer (PFE) Stock

1. Do your homework

Before you start buying Pfizer stock, you need to do some research. The aim is to understand the company’s financial performance, corporate structure and its plans for the future, not to mention competitive threats.

As a public company, you can view Pfizer’s annual and quarterly reports on its Investor Relations website or on the US Securities and Exchange Commission (SEC) database.

In 2021, Pfizer reported full-year sales of $106 billion ($81.3 billion). According to Mike Clulow, Chartered Financial Analyst (CFA) and portfolio manager at EFG-Capital, Pfizer likely has a strong future.

“Investing in Pfizer could act as a shock absorber for your portfolio if this pandemic lasts longer than expected,” Clulow says. He stresses that Covid-related products like Pfizer’s Comirnaty vaccine and antiviral pill Paxlovid should account for about 50% of the company’s sales in 2022.

Though Pfizer’s post-pandemic future is less certain, Clulow is optimistic. “Pfizer is pursuing the clever approach of redeploying them in the short term [COVID-19] Windfall in longer-lived biotech assets [through mergers and acquisitions],” he said.

2. Choose a brokerage

To buy Pfizer stock, you need to open a brokerage account. A broker serves as an intermediary between you and the stock market, facilitating the buying and selling of securities such as stocks and bonds.

If you don’t already have a brokerage account, look for accounts that have no trading fees and low minimum investments. Not sure where to look? There are several leading online brokers in Canada including Questrade, WealthSimple, TD Direct Investing, Interactive Brokers and more.

3. Choose an account

Most brokers offer multiple account options and you should select the one that best suits your financial goals. If you’re saving for retirement, choose an RRSP. An RRSP is a tax-advantaged savings account that allows you to accumulate wealth up to an annual limit ($29,210 in 2022). You don’t have to pay taxes on the growth of your RRSP until you start withdrawing. You can withdraw funds at any time, but you must start the final withdrawal by the end of the year in which you turn 71.

If you want to invest to grow your money but don’t have a specific goal in mind and don’t want to worry about withdrawal penalties or investment limits, another option is to open a taxable investment account. There are no tax benefits, but you are not restricted in how you use the money or how much you can have in your account.

4. Find out how much you can invest

Once you have a brokerage account, consider how much money you can afford to invest in Pfizer stock. When deciding how much to invest, consider the following things:

  • Take care of your budget first. After paying your bills, make sure you set aside money for retirement and your emergency fund. Then decide how much of the money you have left after doing these three things to invest in stocks like Pfizer.
  • Think about your investment strategy. Once you’ve decided to buy Pfizer stock, you’ll need to decide whether to invest in a lump sum or use the dollar cost average. Some people prefer all-inclusive investments when they think a stock’s price is particularly low, while the dollar-cost average allows you to buy stocks on a regular basis and potentially lower your risk.
  • How would Pfizer fit into your overall portfolio? Before investing in individual stocks, think about your goals and the rest of your portfolio. It can be risky to invest too much of your portfolio in a single company. For most it is better to have a wide range of different assets.

5. Place an order for Pfizer

After deciding how much to invest in Pfizer, it’s time to buy the stock. Log into your brokerage account and enter PFE – Pfizer’s stock symbol – and the number of shares you wish to buy. If your platform allows you to buy fractional shares, enter the dollar amount you wish to invest in Pfizer. In Canada, only Interactive Brokers and WealthSimple offer the ability to buy fractional shares.

When buying stocks, you typically choose one of the two most common types of orders: a limit order or a market order. Market orders are executed immediately at the current price, while limit orders are only processed when the stock reaches a price you set. If you expect the price to change, a limit order could be a useful option.

Pfizer is traded on the New York Stock Exchange (NYSE), the largest stock exchange in the world. Trading hours are Monday through Friday from 9:30am to 4:00pm EST, but you can also take advantage of after hours trading on most brokerage platforms.

6. Be aware of currency conversion fees

When you buy American stocks with Canadian dollars, your broker charges you currency conversion fees. These fees range from 1% to 4% and are charged if you convert Canadian dollars into US dollars at the time of purchase and then again when you sell your shares and your US dollars are converted back into Canadian dollars.

These currency conversion fees are in addition to the regular exchange rate, but can be avoided. You can either open a US dollar bank account with a Canadian bank and keep the US money used to buy US stocks in US currency, or you can save on currency conversion fees by running Norbert’s Gambit.

Norbert’s Gambit is when you buy a stock or ETF that is listed on American and Canadian exchanges. You buy Canadian shares of that stock and then ask your broker to take your Canadian shares on the American listing and convert them into American shares of the same stock. You then sell your US stocks and you can use the resulting US dollar to buy any US stock or ETF (including Pfizer) without currency conversion.

How to sell Pfizer stock

At some point, you’re going to want to sell your holdings of Pfizer stock. The process is simple: open your brokerage platform, enter the number of shares to sell and the Pfizer ticker symbol and sell at the current price or set a reserve price.

If your investment has risen significantly in value you should consult a tax adviser, e.g. B. to a chartered accountant (CPA). Capital gains taxes apply when selling for a profit, so an accountant can guide you through your options and discuss how to minimize your taxes.

As a Canadian investor in US stocks, unless you have a 5% or greater interest in a US company and the principal assets of the company are real estate in the US, you are only likely to pay capital gains tax to the CRA.

You must also pay IRS estate tax if you make $5 million or more from your US investments at your death.

How to invest in Pfizer through mutual funds and ETFs

Pfizer is a big company that’s been around for decades. However, that doesn’t mean that Pfizer is guaranteed to continue to do well. Like any public company, Pfizer faces competitive and market barriers that could affect its future.

“Pfizer was one of those winners of the pandemic … and represents a potential victim of its own success,” Clulow said. “With the company poised to manufacture 1 billion doses of vaccines per quarter in 2022, it will be nearly impossible to sustain that momentum in 2023 and beyond. Will investors remain patient until the longer-term story plays out? That is the question.”

To reduce your risk, it’s a good idea to invest in many companies rather than just one. While you can invest by buying individual stocks of different companies yourself, mutual funds and exchange-traded funds (ETFs) can be a more effective alternative. These funds invest in hundreds – even thousands – of companies simultaneously, giving you instant diversification. And many include Pfizer as one of their holdings.

For example, investors looking to invest in Pfizer could buy shares of the BMO Equal Weight US Health Care Hedged To CAD Index ETF or the iShares S&P Global Healthcare ETF (CAD-hedged), which is designed to track the S&P 1200 Healthcare Index.

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