How To Buy Disney (DIS) Shares In Australia

Before buying shares in any company ask yourself why you’re taking that decision. Are you looking for capital growth, income from dividends or a combination of both? Your investment objectives will determine what type of shares you invest in, whether high-growth technology shares listed on the Nasdaq or more defensive companies with a reliable dividend stream.

Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products and services with future growth potential. These should provide a solid platform for future share price growth.

That said, other factors such as takeover rumours can drive up a company’s share price. Investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.

Related: ASX Stocks to Watch

Once you’ve decided which company to invest in, there are several steps to buying shares.

1) Open an account

Whether you’re a seasoned trader, or new to stock market-based investments, you’ll need to open an account with a regulated brokerage that offers access to US markets in order to buy shares in Disney.

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. Look for brokerages that offer low foreign transaction fees.

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, especially foreign transaction fees
• Remember that share investing can prompt tax charges, including the capital gains tax when selling. Speak to your accountant for more details.

Before buying any shares, it’s worth asking 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) Where is Disney traded?

The ticker symbol for Disney is DIS. It’s listed on the New York Stock Exchange which is open for trading from 9.30am till 4pm (US time). You should be able to buy Disney through the vast majority, if not all, brokerage accounts that offer exposure to US shares.

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, rather than Australian shares, although it’s worth comparing the fees charged by different brokers if you plan to trade US shares regularly.

You will be required 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%. 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, and any profit upon selling will be subject to CGT.

It’s worth remembering that holding US shares also carries exposure to foreign exchange risk. If the Aussie dollar strengthens against the US dollar, your shares will be worth less in AUD (and vice versa).

3) Do your research

To find out more about Walt Disney, visit the company’s online investor relations page.

It’s also worth comparing Disney’s valuation to other comparable energy companies. One way of doing this is to look at their relative price-earnings ratios (or P/Es) – shares trading on a high P/E have high expectations of substantial future growth.

Another useful research tool is brokers’ 12-month share price forecasts which can be found on financial websites.

4) What’s 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 benefits from a process known as ‘dollar cost averaging’, a stock market technique which helps you pay less per share on average over time in falling stock markets. Rather than waiting to build up a lump sum, it also means an investor’s money can be put to use in the market straightaway.

Note that drip-feeding an investment may sacrifice capital growth if the share price is rising and you will also pay more in share-trading fees.

5) Place an order

Once you’re ready to buy Disney shares, log in to your investing account or trading app. Type in the DIS ticker along with the number of shares you want to buy or the amount of money you’re looking to invest.

Many brokers allow you to add a ‘stop loss’ once you have bought the shares, which allows you to limit your losses should a share price fall.

6) Review Disney’s performance

Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital that 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 consider whether any adjustments to your holdings are required—to maintain the status quo, buy more stock, or sell existing shares.

Related: Australian Stock Market News

At some point, you will want to sell your holdings. To do this, log in to your investing platform, type in the DIS ticker and select the number of shares you want to sell.

Note that if you’ve made a substantial profit, you may be liable for CGT. The good news for Australian investors is that if that if you have held the asset for more than 12 months, you may be liable for a capital gains tax discount of 50%.

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 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 a ready-made portfolio of upwards of 50 different company shares.Being a large global corporation as well as being a major component of the US stock market, Disney is found in many global, US equity and index tracker funds with exposure to the US markets.