How to Buy Fashion Stocks
So, you’ve decided to diversify your portfolio with apparel stocks. What are the practical steps you need to take?
There are a few different ways to purchase clothing stocks: through online brokers or direct stock purchases from companies. Going through an online brokerage makes the process a bit more intuitive – which is particularly helpful if you’re just starting out.
Here's a step-by-step guide to purchasing stocks with a brokerage account:
1. Investigate Prospect Companies
Stock trading and investing is a volatile business; everyone has a different opinion about which stock is going to perform best, and it’s tempting to go all-in on a high probability. But before you decide to buy stocks in the apparel industry – or any other industry, for that matter – it’s crucial to do research for yourself and understand the risks involved.
The main details to look for include:
- Company financials. How has the company been performing? What's the market cap? Total sales for the fiscal year?
- Future prospects. Is the company expanding or downsizing in the near future? What are Wall Street analysts saying?
- Industry trends. Make sure you’re up-to-date on any changes that could affect the stock price of your chosen apparel stocks. Are there any supply chain issues?
Performance is certainly no guarantee of future results, but it can give you an idea of how the company is doing.
2. Open a Brokerage Account
Once you’ve done your research and chosen the apparel stocks that match your investing goals, it's time to open a brokerage account. You'll need to provide personal information like name, address, Social Security number, and proof of identity. You may also be asked to deposit funds into your account before you can begin trading.
Hint: Use our comparison tool to seek out the best investment broker. We'll find you the right match in a matter of minutes.
3. Decide Your Investment
How much money do you want to invest in clothing stocks? It's a completely individual decision, of course, depending heavily on your financial situation.
Remember the saying – "Don't put all your eggs in one basket," – which applies to stock investing too. Diversifying and spreading out your investments across different stocks is a smart move, as it reduces the risk of losing everything on a bad investment.
When you've chosen an amount, you can deposit funds to your brokerage account using cards, e-wallets, crypto, or bank transfer.
4. Order and Monitor
Depending on the brokerage you use, you can order stocks with a few clicks using a web or mobile app. Choose between a limit order (to be executed at a specific price) or a market order (to be executed immediately). You can also use advanced tools like stop loss and take profit orders.
Once you’ve made your purchase, keep an eye on the stock's performance with regular updates from the brokerage firm. You may choose to buy into more clothing companies if they're performing well, or sell your stocks when it's time to cash out.