Since its inception in 2013, DoorDash has become one of the biggest players in the food delivery industry. With a market worth of over $70 billion and partnerships with over 450,000 merchants, it’s no surprise that DoorDash has caught the attention of investors. If you’re interested in investing in DoorDash, this guide will give you a rundown on how to do it successfully.
Understanding the Basics of Investing in DoorDash
Before investing in DoorDash, it’s essential to understand what the company is all about. DoorDash is a technology-based logistics company that specializes in food delivery. It handles every aspect of the delivery process, from the ordering platform to the dispatching of drivers.
If you’re interested in investing in DoorDash, you can do so in two ways:
- Purchasing DoorDash stocks through a broker
- Investing in a mutual fund or exchange-traded fund (ETF) that includes DoorDash stocks
Investing in individual stocks requires more work and research, so it’s recommended for experienced investors. On the other hand, investing in mutual funds or ETFs is a suitable option for beginners. They are pre-built portfolios that consist of a variety of stocks and are managed by a professional. As a result, they are ideal for minimizing risk and maximizing returns.
The Pros and Cons of Investing in DoorDash
As with any investment, there are pros and cons to investing in DoorDash.
Pros of Investing in DoorDash
- DoorDash has a growing market share in the food delivery industry, making it a promising investment.
- The pandemic has increased the demand for food delivery services, which has had a positive impact on DoorDash’s revenue.
- DoorDash has partnered with several high-profile restaurants, such as The Cheesecake Factory and Chipotle, making it a significant player in the industry.
Cons of Investing in DoorDash
- Competition is fierce in the food delivery industry, and DoorDash faces intense competition from companies like Uber Eats and Grubhub.
- DoorDash is not yet profitable, and there is no guarantee that it will be profitable in the future. As a result, there is some risk associated with investing in the company.
- DoorDash’s success is heavily reliant on its ability to maintain partnerships with restaurants and attract new customers. If they fail to do so, it could have a significant impact on the company’s performance.
How to Invest in DoorDash Stocks
If you’re interested in investing in DoorDash stocks, there are a few steps you need to follow:
Step 1: Choose a Broker
The first step in investing in DoorDash stocks is to choose a broker. A broker is a company that buys and sells stocks on your behalf. There are many options available, including online brokers like E*TRADE and Robinhood, traditional brokers like Charles Schwab and TD Ameritrade, and mobile-based brokers like Stash and Acorns.
It’s essential to choose a broker that works for your specific needs. Some brokers offer commission-free trading, while others may offer more investment options.
Step 2: Open a Brokerage Account
After choosing a broker, the next step is to open a brokerage account. This involves filling out an application and providing personal and financial information.
Step 3: Fund Your Account
Once your account is open, you need to fund it. This involves transferring funds from your bank account to your brokerage account. The process varies depending on the broker you choose.
Step 4: Buy DoorDash Stocks
Finally, after funding your account, you can buy DoorDash stocks. This involves placing an order with your broker to purchase a specific number of DoorDash stocks at the current market price.
Investing in DoorDash Through Mutual Funds or ETFs
If you’re not comfortable investing in individual stocks, you can still invest in DoorDash through mutual funds or ETFs. These funds hold a basket of stocks, including DoorDash, which allows you to have exposure to the company without taking on the risk of investing in it individually.
Some popular mutual funds that include DoorDash stocks are the Fidelity Select IT Services Portfolio and the Vanguard Information Technology Index Fund. If you’re interested in ETFs, the First Trust Dow Jones Internet Index Fund and the Invesco QQQ Trust are great options.
Conclusion
Investing in DoorDash can be a lucrative opportunity, but it’s important to thoroughly research the company and weigh the risks and rewards. Whether you choose to invest in individual stocks or mutual funds, be sure to choose a reputable broker and carefully monitor your investments.
Remember to always invest within your means and be patient with the market. Investing is a long-term game, and it’s not uncommon to experience ups and downs along the way.
Happy investing!