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If you’re a new investor dipping your first toe into the waters of picking individual stocks rather than buying ETFs or mutual funds, sticking to the bluest of blue chips is a popular strategy.
A company like Alphabet (GOOGL), Google’s parent company, with a market capitalization of over $2 trillion (up from $375 billion in 2014) could be a good place to start.
Despite the stability of controlling the world’s biggest search engine, the upside potential of this tech giant is also nothing to sneeze at.
Alphabet’s earnings now top $100 billion per year and show consistent historical growth. There’s no shortage of people who want to learn how to invest in Google and earn money on the back of this company’s continued success.
Now, let’s walk you through the process of doing so.
Key Takeaways
- Alphabet shares are publicly listed on the Nasdaq and are very actively traded, making them highly liquid. There’s no mystery about how to invest in Google stock.
- Aside from the ubiquitous search engine and suite of online utilities, YouTube, Android, and several other brands and businesses all fall under the Alphabet umbrella.
- Opening an account with an online broker is normally the simplest way to invest in Google.
- Novice investors may, however, prefer to invest in ETFs or mutual funds to gain exposure to the tech sector while diversifying their portfolios.
How to Buy Google Stock: A Step-by-Step Guide
Figuring out how to buy Google stock requires no special financial sophistication. However, deciding whether or not to invest in this company does demand a bit of thought.
Before you take the plunge, you should realize that there is some risk involved. Even a technological powerhouse like Alphabet can lose value, so please approach this choice with caution.
Open a Brokerage Account
Opening a trading account online is no more difficult than getting a savings account at your local bank. As soon as you’ve transferred some funds to your broker, you’re ready to start trading.
Nowadays, there are numerous options available for those who’d like to invest in Google and other companies. Fidelity, Vanguard, Robinhood, eToro (and many others) each has its own features, minimum amounts, and fee structure. This makes it a good idea to first determine which online broker will serve your needs best and then decide how much and often you want to invest.
Decide on a Budget
Financial advisors generally recommend saving or investing between 15% and 25% of your post-tax income every month. While this may not be entirely feasible in all cases, it’s good practice to set a fixed amount aside as an investment budget.
If you already have a stock portfolio and are determined to start investing in Alphabet, you’ll have to decide how much of your wealth you want to put into it.
Regardless of how promising Google’s earnings may seem, it’s generally not a good idea to commit anything over 10% of your portfolio to any single stock.
Conduct Your Analysis
One major advantage of investing in such a prominent company is that there’s a wealth of analyst guidance to listen to. Google stock news automatically makes the front page; you’re not likely to have any trouble learning about new developments.
It’s up to you to research any investment you’re interested in. For example, you may compare Google’s earnings per share (EPS) to those of similar companies to determine if this company is overvalued. These kinds of comparisons can be done on websites like Yahoo Finance, through broker research or from the company’s own financial reporting.
Knowing how to conduct fundamental and technical analysis of a stock might tremendously help you build your own strategy and spot the best entry and exit points.
Before you invest in Google, you’ll also want to decide whether you want to purchase voting or non-voting shares. These carry the ticker symbols GOOGL and GOOG, respectively. Changes in the value of each closely mirror those of the other, but their performances aren’t quite identical.
Track Your GOOGL Investment's Performance
Your chosen trading platform’s documentation should tell you exactly how to buy Google stock or shares in any other company, for that matter. Actually, performing the transaction is only a small part of investing, though.
Just like you analyzed the company’s prospects and figured out how to invest in Google and earn money when the share price rises, you now need to keep gathering information.
Knowing how much it cost to buy Google stock when you have invested and assuming that the share price has since risen, you can calculate how much profit you’ll make if you choose to sell.
How to Sell Google Stock
Of course, the object of the game is to come out ahead, but how? To invest in Google stock successfully, you need to ensure that you purchase shares when their value is most likely to increase in the future.
Later, if you have reached your profit objective or if you don’t believe that the upward trend is going to continue, you may choose to convert your Alphabet stock into cash.
Simply use your brokerage’s online interface to tell it that you wish to sell your stock. You can either choose the current market price or specify a value you expect the stock to reach.
As soon as your transaction is matched to a buyer, your shares will be sold.
How to Invest in Google Through Investment Funds
Knowing how to buy Google stock doesn’t necessarily mean it’s a good idea. Any company’s value can go down as well as up, so investing directly in Google shares magnifies your risk.
In a sense, Alphabet is inherently diversified: it always has multiple irons in the fire through the many different businesses it operates. Nonetheless, the bulk of its revenue still relies on various forms of advertising, so it’s always possible that the company’s upward trajectory could stall.
If this should happen, your money will be safer in a fund that holds multiple stocks in the technology sector, including Alphabet.
Some of these are hedged against others, so a decrease in GOOGL’s value should be offset by gains in another area.
Funds currently holding significant positions in Google stock include:
The Vanguard Communications ETF (VOX) and the iShares Core S&P 500 ETF (IVV).
10 ETFs That Hold the Largest % of GOOGL Shares
| Ticker | Fund Name | Segment | % Allocation |
|---|---|---|---|
| GGLL | Direxion Daily GOOGL Bull 2X Shares | Leveraged Equity: U.S. Interactive Media & Services | 17.11% |
| VOX | Vanguard Communication Services ETF | Equity: U.S. Communication Services | 11.97% |
| KQQQ | Kurv Technology Titans Select ETF | Equity: Global Information Technology | 11.34% |
| FCOM | Fidelity MSCI Communication Services Index ETF | Equity: U.S. Communication Services | 11.25% |
| XLC | Communication Services Select Sector SPDR Fund | Equity: U.S. Communication Services | 11.14% |
| IXP | iShares Global Comm Services ETF | Equity: Global Communication Services | 11.11% |
| QQQU | Direxion Daily Magnificent 7 Bull 2X Shares | Leveraged Equity: U.S. – Large Cap | 10.08% |
| FFND | The Future Fund Active ETF | Equity: U.S. Broad Thematic | 9.04% |
| LSGR | Natixis Loomis Sayles Focused Growth ETF | Equity: U.S. – Total Market Growth | 8.66% |
| LRND | IQ U.S. Large Cap R&D Leaders ETF | Equity: U.S. – Large Cap | 8.24% |
Source: ETF.com, as of September 2, 2024
In addition, investors in a fund don’t need to constantly worry about how much it costs to buy Google stock from day to day and week to week.
Whatever happens, a team of professional fund managers can be relied on to take the appropriate action.
Alphabet Stock Splits & How They Affect Investors
Google, or Alphabet stock, has been split thrice in the company’s history.
- In July 2022, it had a 20-for-1 split for all share classes.
- A stock split in March 2014, however, only created the new Class C shares. Shareholders received an additional share for each one they already owned.
- In 2015, shareholders got an extra 2.7455 shares for every 1000 Class C shares owned.
The reason a company decides to split its stock is simply to keep the price of a single share from climbing too high and becoming unaffordable to retail investors. Both the total market capitalization of the business and the proportion owned by each investor remain the same, so a stock split is really just an administrative measure.
Google Stock Split History
| Date | Purpose | Details | Price Adjustment |
|---|---|---|---|
| April 3, 2014 | Creation of a new class of shares (Class C with no voting rights) | Each 1,000 Class A shares resulted in 1,000 Class A (renamed GOOGL) and 998 Class C (new GOOG) shares. | The stock price halved from ~$1,135 to ~$568. |
| April 27, 2015 | Compensation for Class C shareholders due to non-voting status | Every 1,000 Class C shares received an additional 2.7455 shares. | This was a minor adjustment and did not significantly affect the stock price. |
| July 18, 2022 | Traditional split to make shares more accessible to retail investors. | A 20-to-1 split applied to all share classes, increasing the share count. | The price was reduced from ~$2,236 to ~$112 per share. |
Alphabet Dividend History
Historically, Google has typically preferred using excess cash to repurchase shares rather than to provide investors with a source of passive income.
This strategy appears to have changed going forward, though: Alphabet announced its first-ever quarterly dividend of $0.20 per share in April 2024.
The Bottom Line
There’s no doubt that Google is a household name and probably something you use every day. From an investing perspective, this company also combines the stability of a large, well-resourced company with the growth potential that comes with being on the cutting edge of technological development.
Overall, it is a very desirable stock to own; it makes sense for new investors to investigate how to invest in Google and earn money in case the share value increases. Of course, only the future will tell us whether it actually will rise or fall.
Do your own research and always remember your investment decision depends on your attitude to risk, your expertise in the stock market, the spread of your portfolio, and how comfortable you feel about losing money.
The information in this guide does not constitute investment advice and is meant for informational purposes only.
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References
- Investing isn’t just about money—it’s about your future (Fidelity)
- Open Account (Personal.vanguard)
- Commission-free Stock Trading & Investing App | Robinhood (Robinhood)
- Vanguard Mutual Fund Profile | Vanguard (Investor.vanguard)
- iShares Core S&P 500 ETF | IVV (Ishares)
