How To Buy Google (GOOGL) Stock

Google is far more than a search engine. As part of its parent company, Alphabet, Inc., Google has become one of the largest technology companies in the world, complete with cloud computing, software and more.

Its stock price has increased along with its rapid growth. From the beginning of January 2021 to the same time a year later, GOOGL’s stock price has increased by more than 50%, and in the third quarter of 2021, the company reported a 41% increase in revenue year over year.

If you’re wondering how to snag some of that growth for your portfolio, here’s everything you need to know to buy Google stock.

How to Buy Google Stock

1.  GOOG vs GOOGL: What’s the Difference?

Before you get too far down the road of buying Google stock, you first need to decide which kind of Google stock you want to buy. That’s right. Shares of Google—or rather its parent company, Alphabet, Inc.—comes in two main flavors: GOOGL and GOOG.

The difference between them is whether the shares have voting rights. GOOGL is what’s known as a Class A common stock, which gives its shareholders the ability to vote on company matters. GOOG, meanwhile, is Class C stock and does not come with voting rights. Both classes benefit from appreciation in value, like any other stock.

(There’s also a Class B of Google stock that has supercharged voting powers—10 votes for every one that Class A shares get. These are retained almost exclusively by Google’s founders Larry Page and Sergey Brin and ex-CEO Eric Schmidt to maintain control of the company, so you’re unlikely to have the chance to purchase a share.)

As you might suspect, its additional voting rights mean GOOGL can trade at a bit of a premium over GOOG. Since the split in 2014, however, their prices have been pretty similar, and perhaps more importantly, the stocks’ percentage increase in value has been nearly identical. That means you’ll ultimately be deciding whether you’d like to have a symbolic voice in Google’s goings on or not.

2.  Select a Brokerage

If you don’t already have an investment account, you’ll need to open one at a brokerage or with an investment app. To expedite your research, check out our list of best online brokers and best investment apps to find quality choices with low investment minimums and fees.

In addition to choosing the right brokerage for your needs, consider the type of account you want. Investing for your golden years? put your Google stock in a Registered Retirement Savings Plan (RRSP) and you won’t have to pay tax on your investment’s growth until you take out the proceeds. Building wealth for near-term goals? Choose a taxable brokerage account instead.

3.  Decide on an Initial Investment

Because you likely can’t afford a whole share of GOOG or GOOGL, at least not right away, you’ll need to decide on how much (and how) you want to invest. Ask yourself these questions to figure out your ideal initial investment.

• What’s your budget? If you don’t have enough to cover your expenses and save for retirement and emergencies, you may want to hold off on buying Google stock. Once you’ve got these under control, though, you can invest any leftover funds in Google shares.
• What’s Google’s price? Both GOOGL and GOOG trade in the thousands of dollars per share, clocking in at almost $3,500 ($2,700 USD) in early January 2022. Luckily, two brokerages in Canada, WealthSimple and Interactive Brokers, allow you to buy so-called fractional shares that offer you a portion of ownership of an individual stock.
• What’s your investing strategy? You may choose to invest a lot of money at once or to slowly build up ownership over time with small, regular purchases. The latter strategy, called dollar cost averaging, may help you pay less per share on average over time. But more importantly, it lets your money get into the market as quickly as possible. Remember: Time in the market is often more powerful than timing the market.
• What other investments do you have? As an investor, you’ve likely built or will be building what’s called a portfolio. That means your Google investment will complement other holdings, like other companies’ stocks or maybe even some bonds or funds. Think about how Google (and the type of company Google is) fits into your overall investing landscape.

4.  Review Google’s Performance

Before you purchase your GOOG or GOOGL stock, you’ll want to research the company’s financials to get a sense of its performance, risks, competitors and future plans.

As a publicly traded company, Google submits quarterly and annual filings, called Form 10-K and Form 10-Q, respectively, to the U.S. Securities and Exchange Commision (SEC). You can review those documents on Google’s investor relations site or by searching the SEC’s database.

To help you navigate this information, you may turn to expert analyses, like those available on Globe Investor, the Financial Post and Forbes or even the online brokerage platform you are using, like Questrade or BMO InvestorLine, which often come with their own built-in educational resources.

5.  Place Your Order

When you have opened an account and deposited money to invest, you can buy stock by entering the company’s ticker symbol (GOOGL or GOOG) and the dollar value you want to invest or the number of shares you want to purchase.

Most brokers allow you to place market orders, where you buy or sell shares at the current price. Or you can place a limit order and set a specific price to buy and sell the stock.

Google trades on the Nasdaq exchange, meaning you can buy and sell shares between 9:30 a.m. and 4:00 p.m. ET Monday through Friday. Your brokerage may also offer extended pre-hours or after-hours trading.

6. Keep Currency Conversion Fees and Taxes In Mind

While your brokerage will take care of the paperwork necessary to execute the trade for the U.S.-based stock from Canada, you should keep in mind that you will be subject to taxes and currency conversion fees whether you’re buying or selling your Google shares.

Currency conversion fees between 1% to 4% will be charged as part of the process of converting your Canadian dollars into U.S. dollars for the purchase of your Google Stock as well as another 1% to 4% fee for converting your money back into Canadian dollars when you sell. All of this is on top of the exchange rate at the time you buy or sell the stock.

You can bypass these fees with a U.S. dollar bank account by keeping the money you use to purchase U.S. stock in American dollars at all times. You can also perform Norbert’s Gambit.

This maneuver is when you buy a stock or ETF that’s interlisted on American and Canadian stock exchanges. You buy Canadian shares of that stock or ETF, then you ask your brokerage to “journal over” your Canadian shares and turn them into American shares of the same stock, you then sell your American shares in U.S. currency and can use the U.S. dollars that result to purchase any American stock or ETF you want, like APPL, without converting from Canadian dollars.

Meanwhile, as a Canadian, you are subject to a 15% withholding tax to the IRS if you earn dividend income on a U.S. investment unless that investment is within an RRSP or Registered Retirement Income Fund (RRIF). These investment vehicles are specifically tax-exempt thanks to a treaty between Canada and the U.S. Government, which doesn’t include other Canadian registered accounts such as a Registered Education Savings Plan (RESP).

Plus, in the unlikely event you earn $5 million USD or over on your U.S.-based investments, you will have to pay an estate tax to the IRS when you die.

7.  Review Your Investment’s Performance

Even with a stock like Google, you don’t want to set autopilot and never revisit your investment. You’ll need to check in periodically to make sure it’s helping you make satisfactory progress toward reaching your goals.

To see how your investment measures up to the rest of the market, you can compare Google’s performance to that of a benchmark index, like the S&P 500. You can also track the evolution of its financials using the same documents you performed your preliminary research with.

How to Sell Google Stock

When you’re ready to sell your Google stock, the process is as easy as buying your shares. Simply log into your broker’s trading platform and enter the ticker symbol and the number of shares or dollar amount you want to sell.

If you’ve seen large increases in value, you may want to meet with a tax professional before selling your Google stock. They can help you strategize ways to minimize any capital gains taxes you may incur.

Thankfully, capital gains from U.S. stocks are only payable as part of your Canadian income tax and you’ll only pay 50% of the gain. This is unless the principle asset of the company in question comes from U.S. real estate. In that case, you will have to pay capital gains tax to the IRS, not just the CRA.

How to Invest in Google with an Index Fund

Investing in any individual stock, even Google, is a risky bet. That’s why financial advisors recommend a diversified approach that involves investing in tens, if not hundreds, of stocks. One of the easiest, and cheapest, ways to do so is through index funds and exchange-traded funds (ETFs) that seek to duplicate the performance of major market indexes, like the S&P 500. These funds provide exposure to hundreds of investments in just a single share.

Luckily, Google is easy to find in many index funds. It occupies about 7% of Nasdaq 100 funds and 4% of S&P 500 funds.