The Ultimate Guide to Buying Pinterest Stock and Optimizing Your Investments

Before you buy Pinterest stock, decide if it’s the right investment for you. Here’s how to evaluate Pinterest and buy stock in the company.

Are you considering investing in Pinterest stock to achieve higher returns? Look no further! This comprehensive guide offers step-by-step instructions on evaluating and purchasing Pinterest shares, enabling you to make informed investment decisions. Start your journey towards financial success with Pinterest stock today.

This article provides information and education for investors. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks or securities.

The idea-sharing platform Pinterest was one of the buzziest initial public offerings last year: The company went public in April 2019, which means investors can now buy Pinterest stock under the ticker symbol PINS.

But just because its stock is now available, does that mean you should buy Pinterest? Maybe … or maybe not. Here’s what to consider before you buy Pinterest stock.

1. Know Pinterest, the company

Maybe youre already an avid “pinner,” someone who uses Pinterest to post photos that inspire you. But whether or not you use Pinterest, as a potential investor its important to understand how the company makes money, its prospects for growth and other key financial data.

You can learn a lot about Pinterest from its S-1 filing, the form companies file with the Securities and Exchange Commission before going public. Pinterests S-1 included information on how it markets itself to advertisers — its main source of revenue — and where it sees opportunities to grow. (Plus, youll see the company describes itself as “a productivity tool for planning your dreams.” Who knew?)

Another way to find out about a company is to look online for news reports that cite analysts commentary and ratings on the company.

Keep in mind that initial public offerings arent always instant successes. Take Facebook, which saw its share price drop straight out of the gate when it went public in May 2012. It started gaining only after about a year.

» Learn more: How to research stocks

2. Know your portfolio

If you decide that Pinterest is a strong prospect for your investment dollars, its time to make sure the companys shares suit your overall portfolio.

Here are some questions to consider:

• What are you invested in already? Ideally, your overall investment portfolio is diversified across a variety of industries and sectors. That increases the likelihood that even if one of your investments starts losing value, others are maintaining an even keel or growing because they face different headwinds at different times.

• How are you faring on other financial goals? If this is money youll need for retirement or another important goal, or if you’re not so comfortable with the risk in hitching yourself to one company, consider investing in index mutual funds and exchange-traded funds. With those investments, youre generally buying shares of a slew of companies, and thats a great path to a diversified and less volatile portfolio.

• Whats your time horizon? A popular rule is to avoid investing any money in the stock market that youre going to need in the next five years. You dont want to be caught needing to pull the money out during a market downturn — you want time on your side so you can leave the money sitting there until the market recovers and starts to grow again. Heres more on how to invest in stocks.

» View our list: The best-performing stocks

3. Consider your budget

A lot of the questions you just answered above can also inform how much you might choose to invest in Pinterest. But above all, remember this: There’s usually no need to go big on your first investment in a company.

In fact, investing routinely in shares of companies you believe in — an approach called dollar-cost averaging — is a popular way to ensure that you don’t inadvertently buy too many shares of an investment when its price is near a high. Making regular purchases over time smooths out the average price you pay for your shares.

When setting a budget, remember also the tenet of not investing money you might need in the next five years. As of October 2020, Pinterest shares are trading just below $50, an all-time high for the company. But you shouldn’t count on an upward trend continuing with Pinterest or any stock, particularly if you’re hoping to use that money for something else in the near future.

» Need help with the mechanics? See our tutorial on how to buy stock.

“You can learn a lot about a company from its S-1, the form it files before going public.”

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