How to Buy Lucid Motors (LCID) Stock – Forbes Advisor
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Electric vehicles have been growing in popularity for years, and the trend has only grown stronger with skyrocketing gas prices. At the end of April 2022, the national average was $4.11 per gallon, up from just $2.87 a year ago.
While Tesla Inc. (TSLA) has garnered the lion’s share of attention for its luxury electric cars, there’s a new competitor making waves: Lucid Motors.
Over the past three years, Lucid Motors has experienced substantial growth and its stock price has increased approximately 82%. Whether you’re already a fan of the Lucid Air or just believe in the future of electric vehicles, here’s how to buy shares of Lucid Motors.
How to Buy Lucid Motors (LCID) Stock
1. Find a broker
To invest in Lucid Motors, you must start by opening an account with a broker. There are hundreds of brokers and investment apps available, so it’s worth looking for a broker that offers low account minimums and low fees.
Depending on your brokerage platform, you can usually choose between several account options. If you’re focused on long-term retirement savings, you might want to consider opening an Individual Retirement Account (IRA) to take advantage of its valuable tax benefits. For shorter term goals, you can open a taxable brokerage account.
If that seems overwhelming, check out our list of the best online brokers for beginners.
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2. Research Lucid Motors Finances
Investing in just one company can be risky, so do your homework to make sure you’re making the right decision.
Lucid Motors is a publicly traded company, so it is required to file its financial reports with the United States Securities and Exchange Commission (SEC). Potential investors can view these materials, along with the company’s investor presentations and press releases, on the Lucid Motors website. investor relations website.
Notably, the company’s annual report highlights that Lucid Motors has incurred net losses every year since its inception and expects to face increased expenses and losses for the foreseeable future. As of December 21, 2021, the company’s accumulated deficit was approximately $6.1 billion.
That’s not uncommon for a relatively young, rapidly growing company, but it does mean investing in Lucid Motors can be riskier than investing in an established company with a track record of strong returns.
Take the time to consider the risks the business faces and how it plans to stand out in a competitive market. For example, Lucid Motors’ least expensive vehicle starts at $77,400, far more than the average sedan. His investor presentations emphasize that his target market is “post-luxury” consumers, or high-income people who are more interested in durability and quality than status symbols.
Like Tesla, Lucid Motors eschews the traditional car dealership model by selling directly to consumers online and through its retail network. Two other differentiators in the company’s favor are that the Lucid Air has a range of over 500 miles on a single charge, and that it was selected as MotorTrend’s 2022 Car of the Year.
3. Choose an investment strategy
When you’re ready to invest, think about how much money you have on hand to invest in stocks. The amount you want to invest depends on a variety of factors, including the state of your emergency fund, your other investments, and the price of the stock you’ve selected.
As of April 20, 2022, Lucid Motors was trading at around $21. It is a relatively low price; if you invest a few hundred dollars, you could buy several stocks.
Two investment methods are lump sum investment and cost averaging. If you invest a lump sum, you take a fixed amount and invest it all at once. In contrast, dollar cost averaging works with smaller amounts. You invest the same amount but on a fixed schedule, like $50 per week.
Lump sum investing makes sense if you expect a stock to perform very well and want to lock in its current price. Cost averaging is a better choice for long-term investing because it helps reduce your level of risk.
4. Place an order
Once you have opened an account and decided how much to invest, you can buy your first shares of Lucid Motors. To place an order, go to your broker’s trading platform and enter the Lucid Motors ticker symbol, LCID. Enter the number of shares you want to buy or the amount of money you want to invest, then select the type of order you want to place.
There are several types of orders, but the most common are market and limit orders. With a market order, the order goes to the current price during trading hours. Limit orders are only processed when stock reaches a certain price that you specify when placing the order. Limit orders are a good idea if you expect the stock to drop in the near future and want to buy stocks as soon as the price drops.
Lucid Motors is listed on the Nasdaq stock exchange. Nasdaq trading hours are Monday through Friday, 9:30 a.m. to 4:00 p.m. ET. The Nasdaq also has trading before and after hours. Pre-market hours of operation are 4:00 a.m. to 9:30 a.m. ET and after-hours trading hours are 4:00 p.m. to 8:00 p.m. ET.
5. Have a sales plan
Whatever your investment goals, there will likely come a time when you need to sell your shares of Lucid Motors.
To sell your shares, enter the broker’s trading platform and type in the stock symbol and the amount you want to sell or the dollar amount. As with buy orders, you can decide to sell your shares immediately at the current price or only sell them when the stock reaches a certain price.
If you plan to sell your shares of Lucid Motors – or any stock – and have made a profit, you may be liable for capital gains tax. Before making any decisions about your portfolio, talk to a tax professional to make sure you have a plan in place to minimize your taxes and avoid a surprise tax bill.
Other Ways to Invest in Lucid Engines
Investing in a single company is always risky. Your investment is entirely dependent on the performance of this business and if it does poorly or fails completely, you could lose a substantial amount of money.
Experts recommend investing in a diversified portfolio of many stocks to avoid this. Although you can create your own portfolio of individual stocks, it can take a long time to do it yourself. An alternative strategy is to invest in index funds and exchange-traded funds (ETFs). These funds are made up of hundreds of companies, which spreads your investment and reduces the level of risk.
There are more than 70 ETFs that currently offer exposure to Lucid Motors, including funds focused on clean energy, auto manufacturing and the broader stock market. Some of the most popular include:
- ALPS Clean Energy ETF (ACES): This fund aims to replicate the performance of the CIBC Atlas Clean Energy Index. Lucid Motors is one of the fund’s largest holdings.
- Invesco QQQ Trust (QQQ): This fund corresponds to the performance of the Nasdaq 100 index. Lucid Motors represents approximately 0.27% of the fund’s allocation.
- Vanguard Total Stock Market ETF (VTI): This fund allocates 0.03% of its shares to Lucid Motors. Although this is a small percentage, VTI gives you exposure to a wide range of companies, it tracks the performance of the CRSP US Total Market Index and invests in small, mid and large capitalization companies.