Tesla Inc. (which trades under the symbol TSLA) is a car company, but if you want to buy Tesla stock, it helps to be comfortable with roller coasters.

That’s because wild up-and-down share price swings are a hallmark of the stock’s performance, especially given the company’s mercurial CEO, Elon Musk, and his constant presence in the news, particularly since purchasing Twitter. But maybe the opportunity to buy Tesla stock during one of its price dips is what piques your interest.

Whether you’re buying a dip or looking to add the electric car industry to your portfolio, here’s how to buy Tesla stock.

1. Make sure you have a brokerage account

If you don’t already have an investment account, you’ll need one to buy Tesla stock. In general, you’ll want a brokerage account with no trading commissions, useful trading tools and no account or inactivity fees.

Worth noting: If you’re buying Tesla shares for retirement because you believe in the company’s long-term potential, a Roth IRA could be a good parking spot. That’s because qualified withdrawals from a Roth are tax-free, so you won’t be responsible for paying Uncle Sam for investment gains (like with a traditional IRA), which could be substantial with a potentially fast-growing company like Tesla.

2. Research Tesla’s fundamentals

Before you load up the trunk with Tesla shares, pop open the hood and see what you’re really getting into. Remember, when you buy a stock, you’re purchasing a small portion of an actual business, not just hitching a ride on a cult of personality.

Tesla’s balance sheet, income statement, competition and management (all explained in our guide on how to research stocks) will help you give the company a good once-over.

You can access research, analyst ratings and other key information about Tesla via your brokerage account or a financial information website. If you like what you see, your next step is to consider the rest of your portfolio.

3. Decide whether you should buy Tesla stock

One of the key tenets of investing is diversification, which means spreading your money around among many different investments — a variety of companies, industries and geographical locations, as well as investments that aren’t tied to the stock market, like bonds or real estate. This is the “don’t put all of your eggs in one basket” rule you may have heard.

If you don’t have a diversified portfolio yet, one of the easiest ways to get there is by investing in mutual or index funds rather than individual stocks. Funds essentially bundle stocks together to lessen the chances that you’ll lose your entire investment if a single company tanks. (Here’s how to invest in index funds, many of which, conveniently enough, contain Tesla stock.)

If you do already have a diversified portfolio, you’ll want to consider how Tesla fits into that — ask yourself how much you’re already exposed to EV stocks, or simply to stocks in general. A strong portfolio has a healthy mix of stocks and bonds, though the exact asset allocation depends on your goals, timeline and risk tolerance.

4. Set a budget for your Tesla stock purchase

This is partially dictated by how much money you have to invest. But you should also think about how much of your portfolio you want to tie to Tesla’s business performance, and where you stand in your progress toward other financial goals.

High on most lists should be an emergency fund. Experts suggest aiming for three-to-six months’ worth of expenses, though even $500 to $1,000 is a good start. Your emergency fund should go not into an individual stock like Tesla, but into a high-yield savings account where it is safe and accessible.

It’s wise to also consider when you’ll need the money you plan to invest in Tesla — generally speaking, stock market investments should have a time frame of five years or more, meaning you should be thinking of Tesla as a long-term investment, and only investing money you won’t need in the near future.

Finally, there’s your budget. What if you don’t have enough to buy an entire share of Tesla? You may be able to purchase a fractional share — essentially a piece of a share. Several brokers now offer fractional shares of individual stocks.

5. Decide when to buy Tesla stock

When a company’s share price is somewhat unpredictable, it can be hard to know when to step on the gas and go forward with purchasing shares. The good news is that you have options. They are:

• Buy Tesla stock right now: When you’re ready to buy Tesla stock in your brokerage account, you’ll be given the option to choose between a market order and a limit order. A market order places the trade right away. It will be executed at the best possible price at the time of your trade. The potential downside is that with a fast-moving stock like Tesla, by the time your order goes through, you could end up paying more (or less!) than what you were quoted.
• Buy Tesla stock at a specific share price: A limit order allows you to set the price you’re willing to pay and only takes place if the stock reaches that price or lower. It’s a good way to ensure some predictability in what you pay. A possible downside: Your order may not be fully executed, or even fulfilled at all, if Tesla’s price swings so wildly that enough shares don’t become available before the order expires.
• Buy Tesla stock systematically over time: Dollar-cost averaging takes some of the fear and guesswork out of deciding the best time to buy Tesla stock. Instead of buying all the shares you want in a single purchase, you spread out your trades and buy shares at regular intervals over time (days, months and even years). You can schedule these purchases based on price with a stop-loss or stop-limit order, as explained in more depth in our full guide to how to buy stocks.

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