How to Buy Cheap GM Stocks
During stock market downturns, people look for undervalued stocks from sound companies. These bargain hunters decide on stocks they believe will experience a rebound in price and make for profitable investments down the road. In spring 2009, General Motors qualified as a cheap stock with its price at an all-time low. Should it be considered a good investment, however? Consider that people viewed GM as a cheap stock at its all-time low of $9 in late 2008, and then saw it continue to drop to around $2 per share just a few months later.
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Instructions
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Researching GM Stock
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Determine whether GM stock is cheap enough to qualify as a good investment. Conduct some analysis of company fundamentals by researching whether the company is sound, whether its products are competitive and whether GM is likely to weather the serious economic problems that automakers have experienced since the turn of the 21st century.
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Determine your own notion of "cheap" GM stock. Compare the current price to previous price levels over several time frames. If the stock price is at a 5-year low, for instance, that may be a cheap price. On the other hand, the price can go lower still.
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Choose a point at which you will sell the stock if it drops lower, if your desire is to protect your capital. If you invest $500 in GM at $5 per share, for instance, you may only be willing to risk $200. You would thus need to enter a stop sell order at $3 so you could keep $300. Remember that you should also factor in transaction fees when making these decisions.
Buying GM Stock
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Buy shares of GM stock through one of a few methods: using an online broker or your own stockbroker.
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Use an online brokerage account to purchase shares of GM for a low transaction fee.
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Call your own stockbroker to buy GM stock, if you already have an account with a local brokerage. Instruct the broker to buy a certain number of shares using the cash in your account, or send or deliver the money if you do not have enough cash in your account.
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Open an account with a local brokerage if you do not have one and you do not want to invest online. Then purchase the shares through the brokerage.
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Tips & Warnings
GM does not offer a stock purchase plan directly from the company.
