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General Electric Co. (GE) is a leading US industrial stock that operates global manufacturing operations in the aerospace, healthcare, renewable energy and power generation sectors.
Despite being a US leader for nearly a century, GE recently announced a new strategy to split into three independent companies: one specializing in healthcare, another in renewable energy and energy, and an aerospace company.
If you’re excited about the future of GE 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 you use your hard-earned cash to invest in GE, do some research to make sure you’re familiar with the company’s management and current strategy.
Like any public company, GE is required to file annual and quarterly reports with the Securities and Exchange Commission (SEC) — you can view these documents on the company’s Investor Relations page.
Other useful resources for stock research include expert analysis from Fidelity or Morningstar. You may use GE financial information and expert recommendations to customize an investment strategy to suit your needs.
2. Choose an investment platform
If you don’t already have one, you’ll need to open an account on an investment platform to buy shares of individual stocks like GE. You can also buy a wide range of other assets such as bonds, exchange traded funds (ETFs) and mutual funds on these platforms.
- online broker. If you’re interested in taking an active role in managing your investments, an online brokerage account allows for more self-directed access to your portfolio.
- investment apps. These apps are best for people who are just starting out in investing and want to learn more about markets. Some offer you self-directed investment tools for a more hands-on approach, while others offer services more akin to robo-advisors.
- Robo Advisor. These are automated management platforms that manage your investment portfolio. Some robo-advisors are free, but the best charge annual management fees and provide access to financial advisors. Not all robo-advisors will let you buy stocks of individual stocks.
- Full Service Broker. Park your investment decisions in a fully managed account when you want top-level advice. This option usually includes a full range of services — such as estate and retirement planning — as well as investment advice. Fees will likely be highest if you choose to go this route.
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3. Choose the right account type for your goals
Depending on the platform you choose to invest in, you have several different account options to choose from. Before you decide which account to open, consider your long-term goals:
- retirement accounts. Individual Retirement Accounts (IRAs) offer you various tax benefits when investing for retirement. SEP IRAs and traditional IRAs offer tax deductions on your contributions, while Roth IRAs offer tax-free withdrawals. They also have annual contribution limits.
- Taxable Broker Accounts. These are better options when investing in short-term goals. Your earnings are usually subject to capital gains tax, but there are no annual contribution limits and you can withdraw your money at any time.
4. Decide how much money you want to invest in GE
Once you have a brokerage account, you can decide on an investment budget. As you ponder how much to invest in GE or any other company, ask yourself the following questions:
- Do I have an emergency fund? The stock market can be volatile, so you should only invest after you’ve established an emergency fund and are confident that you can comfortably afford your other bills.
- When do I need this money? In general, money that you need in one to five years should not be invested in stocks. The risk of losing cash and needing that money before it can recover is too great. If you invest in the stock market, you should only invest money in stocks if you have five years or more before you need to access the money.
- How does GE fit into my portfolio? Regardless of your investment goals, investing in just one company is never a good idea. To protect yourself from market changes and reduce the risk of losing money, you need to build a diversified portfolio and invest in many stocks and industries. Before you invest in GE, consider how it fits in with the other investments in your existing portfolio.
- What is the current share price? As of October 2022 shares of GE The price was over $60 per share. Some brokers allow you to buy fractional shares — chunks of individual shares — but not all do, so you may have to invest enough money to cover the cost of an entire share.
5. Place an order
Once you know 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 wish to buy or the dollar amount you wish to invest.
You can usually select an order type when buying shares. The simplest option is a market order, where the order is filled at the current price. However, you can also use a stop order or limit order to buy when GE shares reach a certain price.
GE is traded on the New York Stock Exchange (NYSE). The NYSE’s core trading session runs Monday through Friday from 9:30 a.m. to 4:00 p.m. EST.
5. Monitor the performance of your portfolio
After buying GE stock, check regularly – e.g. quarterly or annually – see how it’s performing and how it compares to the broader market. Using a benchmark like the S&P 500 or the Dow Jones Industrial Average (DJIA) is a good way to see how your portfolio compares to the broader market.
How to sell GE stock
Selling GE stock is a simple process. Enter your brokerage account trading platform and enter the ticker symbol and the dollar amount or number of shares you wish to sell. You can decide to sell at the current price, or you can decide to sell when it reaches a certain point.
Capital gains taxes may apply when selling shares for a profit. Before you sell stocks, you should meet with a tax professional to discuss ways 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. Newbies and those who are more cautious about investing can 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 companies in an index or invest in a representative selection of stocks. Investing in index funds gives you exposure to companies like GE, but they also give you exposure to hundreds of other companies at the same time, allowing you to diversify your portfolio.
As a large company, many index funds add GE to their holdings. In fact, there are more than 170 exchange-traded funds (ETFs) that invest in GE stock. The largest 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).