How To Buy Google/Alphabet (GOOGL) Stocks & Shares In Australia

Before buying shares in any company ask yourself why you’re taking that decision. Does the company have great future prospects with a share price that could go from strength-to-strength? Or is there takeover talk in the offing that could potentially drive up a company’s share price?

Maybe the company you’ve identified is on a recovery mission and its share price is starting to recover from previous lows.

There are several steps to take once you’ve satisfied yourself about the reasons for buying shares in a particular company, such as Google.

1) Open an account

Whether you’re a seasoned share trader, or someone who is brand new to stock market-based investments, if you want to buy shares in Alphabet, you’ll need to open an account with a regulated brokerage.

Stockbroking is a competitive market place and services for DIY investors come in a range of guises—from online investing platforms run by some of the biggest names in financial services, to investment trading apps that work off your smartphone or tablet.

Before opening an account, bear in mind the following:

• Keep your ultimate financial goals in mind
• Be prepared to ride out stock market ups and downs
• Aim to keep trading costs to a minimum
• Remember that share investing can prompt tax charges, for example, CGT when selling part of your portfolio.

And before buying any shares ask yourself these questions:

• Should I take financial advice?
• Am I comfortable with the level of risk in question?
• What’s my investing budget?
• Can I afford to lose money?
• Do I understand the company in which I’m looking to invest?
• Am I protected if my platform provider/adviser goes out of business?

2) Find out where Alphabet is traded in Australia

The ticker symbol for Alphabet is GOOGL and the company is traded on the Nasdaq market in the US. In Australia, the Nasdaq market opens between 11:30pm-1:30am AEST depending on daylight savings.

You should be able to buy US shares through most brokerage accounts. Buying shares in US dollars incurs a foreign exchange fee (typically around 1%) unless you fund the purchase from a US dollar account.

Most brokerages also charge a slightly higher transaction fee for buying US shares rather than local shares on the ASX; however, it’s worth comparing the fees charged by different brokers if you plan to trade US shares regularly.

You will be asked to complete a W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%. Holding US shares also carries exposure to foreign exchange risk depending on how the Australian dollar compares compared to USD.

Since Australia and the US have a Double Tax Agreement, any dividends from US shares will be taxed in the US. However, you will be required to declare all of your foreign income on your Australian tax return.

As with Australian shares, any profit on US shares will be subject to Capital Gains Tax.

3) Do your research

To find out more about Alphabet, go online and visit the company’s investor relations page.

4) Confirm your investing strategy

People tend to invest in one of two ways: either with a lump sum purchase, or via smaller, steadier amounts over time.

The latter method is often referred to as a means of ‘dollar-cost averaging’, a stock market hack which may help you pay less per share on average over time. Rather than waiting to build up a lump sum, it means an investor’s money is being put to use in the market straightaway.

5) Place an order

Once you’re ready to buy shares in Alphabet, log in to your investing account or trading app. Type in the ticker symbol GOOGL and the number of shares you want to buy, or the amount of money you’re prepared to invest.

6) Review Alphabet’s performance

Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital you review how each component is performing on a regular basis: monthly, quarterly, or annually.

Doing this gives you the opportunity to review performance and ask if any adjustments to your holdings are required—to maintain the status quo, buy more stock, or sell existing shares.

If you’re pleased with the performance of your shares and want to take a profit, you’ll want to sell your holdings. To do so, log in to your investing platform, type in the ticker symbol and select the amount that you want to sell.

Note that if you’ve made a substantial profit, you may be liable to pay Capital Gains Tax (CGT) when you come to sell your holdings. However, there is a CGT discount of 50% for Australian individuals who own an asset for 12 months or more. This means you pay tax on only half the net capital gain on that asset.

Find out more here about CGT, rates and allowances.

Investing directly in individual stocks can be an absorbing and, hopefully, profitable experience. It may also qualify you for shareholder perks specific to the company in question.

Investing directly in individual companies can, however, leave you vulnerable to stock market volatility and unforeseen swings in share prices. That’s why, financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold hundreds, if not thousands, of company shares.

Being a major component of the Nasdaq index, Alphabet is found in many funds incorporating a bias towards the US.

Note: When investing, it’s possible to lose some, and very occasionally all, of your money. Past performance is no prediction of future performance and this article is not intended as a recommendation of any particular asset class, investment strategy or product.