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Originally Posted On: https://www.cruisehive.com/carnival-cruise-line-stock-benefits-and-tips/42134
Why buy cruise line stocks? Learn some tips and strategies from the pros to help you decide when and how to invest in Carnival cruise line stock.
If you are in a position to invest right now, you are probably looking to build a well-rounded portfolio with a variety of different kinds of stocks. One type of share that may appeal to you is a cruise line.
As with any other stocks, the time you choose to buy can be critical in determining whether or not you make a profit.
One of the Carnival cruise line stock benefits you can count on is onboard credit, so this kind of stock pays off particularly well if you regularly go on cruises, and especially if you enjoy this activity multiple times per year.
Even if you aren’t exactly the biggest fan of traveling or going on the ocean, there are still many other appealing factors in buying and selling Carnival cruise line stock.
Today we’re going to go over some of the pros and cons of this investment option. We will also cover some tips and strategies to make the most out of your investment, such as when to buy and sell and how many shares to buy at once.
1. Do Your Research
This article will provide you a solid general understanding of the cruise line stock market. Ultimately, however, it is your decision whether to invest at a given time.
Stock prices fluctuate constantly every day, so if you want to have perfect timing, you may want to consult a financial advisor and watch the markets for a while on websites such as MetaStock, Yahoo! Finance, and The Motley Fool.
Sites such as these provide tools for forecasting stock prices, and many of them can connect you with expert advisors who can give you their opinion on decisions you are mulling over.
If you are newer to investing, you may want to start with a free service such as Yahoo! Finance. Pay-to-use websites such as The Motley Fool and MetaStock tend to offer more advanced tools and expert advice, but you may not be able to get the most out of using these services right away unless you already have a fair amount of experience under your belt.
Technical Analysis for CCL by TradingView
2. Be Prepared for Turbulence
Historically, Carnival cruise stock options have fluctuated pretty regularly. In the long-term, however, these stocks have continued to rise in value, and many cruise stock investors have netted some solid returns.
As with any stock, however, historic trends can still change, and any investment you make is at your own risk. If you can familiarize yourself with the patterns of rising and falling values, you can time your buy-in to be when the stock is at a low point and about to go up again, thus maximizing your Carnival cruise line stock benefits.
3. How to Buy Cruise Line Stocks
While many people choose to hire a stockbroker, there are other services you can use on your own time. One place you can look to start investing is with your current bank or credit union.
Wells Fargo and Capital One are a couple of examples of banks that offer this service. Some online brokerages have a lot of benefits. TD Ameritrade, Fidelity, and E*Trade are all popular options.
Fidelity is a great option if you aren’t looking to spend an arm and a leg on the investment process. It offers a zero-expense-ratio index and $0 account minimums, which can help you keep more money to invest with. One of our favorite things about Fidelity is that it does not charge for its commissions.
TD Ameritrade also charges $0 per trade and has no account minimum, so it is another good option for beginners. Their products and tools are top-notch, and the research they provide is comprehensive and in-depth.
E*Trade may be a better option if you are a long-time investor and you are looking to branch out. You can trade ETFs and mutual funds for free on this website, but keep in mind that it is geared towards active traders. If you already have accounts on multiple trading platforms, this highly acclaimed brokerage might be a good way for you to expand your portfolio.
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4. A Breakdown of Onboard Credits
OBCs are issued at a rate of one credit per cabin per 100 shares. That means that you’ll need to buy-in with at least 100 shares is you want to start accumulating onboard credits.
Even if you invest in more than 200 shares, your two onboard credits will only apply to one cabin each. The level of credit you get depends on the cruise line you invest in, and we’re just going to focus on Carnival cruise line stock benefits for now.
The amount of credit you can get on your stateroom depends on how long of a cruise you are going on. You can get $250 in OBC for sailings of at least 14 days, $100 for sailing between seven and 13 days, and $50 for sailings from one to six days.
Do keep in mind that if you have obtained other OBCs through a different avenue, they may supersede your investor OBC. In other words, OBCs from different offers typically will not “stack” with any OBCs you get from being a shareholder. If one OBC exceeds another OBC you have, you should be able to use the OBC with the greater value.
As investment OBCs tend to provide more value than those available through other offers, (OBCs offered at the time of booking, for example), you will usually still benefit from your investment, even if you have other forms of OBC.
5. Taking Advantage of Your Investor OBC
If you want to reap the benefits of your OBC, you’ll want to make sure to let your cruise line know that you are a shareholder. This requires that you submit a copy of your brokerage statement as much as three weeks before sailing.
The name on your cabin needs to match the name on your brokerage statement. If you have a jointly owned stock with someone else, you will still only get one cabin per 100 shares, so if you both want to sail in separate cabins, you will need to own at least 200 shares. Your investor OBC cannot be transferred to someone else, not even family members.
6. What Can You Use Your OBC For?
You can use your OBC to pay for almost anything offered on the cruise, including food, drinks, and massages. The better way to answer this question is to say what you can’t use your OBC for.
On Carnival cruise lines, you cannot pay your daily gratuities with your OBC. So make sure you bring enough spending money to leave a good tip. You also won’t be able to gamble with your OBC, as it won’t work in the casino.
Lastly, you can’t exchange your OBC for cash–after all, if people could do that, nothing would be stopping them from cashing in and walking off the boat with a couple hundred dollars in their wallets.
Also, if you are taking a complimentary cruise or sailing at a reduced rate, you won’t be able to use your OBC. Lastly, travel agents taking advantage of a travel agent rate, and Carnival employees are excluded from using OBCs.
7. Saving Up Money to Invest
Cruise line stocks are not cheap, and if you want to get the most Carnival cruise line stock benefits, you’ll probably want to buy at least 100 shares. The exact amount to invest varies between cruise lines and what the price happens to be at a given time.
When the COVID-19 pandemic hit in March-April of 2020, cruise line stock prices rock bottom. Even at such low prices, it still would take at least $1,500 to buy a significant amount of stock. In the past, stock prices for carnival cruise lines have ranged from $40 to $60, sometimes fluctuating outside of these averages.
If you buy in at a particularly low-cost time, you can get 100 stocks in Carnival Corp. for less than $2,000. When prices are closer to the average, you may be investing $4,000 to $5,000, and when prices are particularly high, the price of 100 stocks could be over $6,000.
If you are organizing your investment funds, you’ll probably want to have around $5,000-$8,000 set aside to play around with cruise line stocks. If you’re not quite in that financial position, do bear in mind that you can still buy as little as one stock–but less risk means less opportunity for reward.
8. Predicting the Rise and Fall of Cruise Line Stocks
Cruise lines depend on ticket sales to stay “afloat,” so to speak. Even if we lived in a world where we had perfect weather forecast predictions months in advance, it could still be difficult to know when people are going to buy tickets to go on cruises.
Unforeseeable natural disasters such as the COVID-19 pandemic can be difficult to predict as well. When the pandemic happened, large social gatherings were prohibited by most countries, and even after things started to open back up, many people were still reticent to go on cruises with a bunch of strangers. Yet when the first trials of a vaccine were announced, cruise bookings jumped significantly.
Ultimately, the key to staying ahead of changes in cruise line stock prices is to keep track of when people are making bookings. If you can see changes happening around the world that signal that people are either going to start booking more cruises or stop booking them at all, you might be able to make a significant profit.
9. Understanding Carnival’s Investments
A smart investor does not operate on an island of her own. If you want to be successful at investing, you need to pay attention to what your investments are investing in. Yes, you read that right. Carnival is a company just like any other, and they are constantly looking to attract new customers and expand their available trips.
One of the key ways they do this is by periodically investing in new ships with which to expand their fleets. One ship that people are very excited about is the Mardi Gras, which is named after Carnival’s first cruise ship that set sail in 1972.
This massive boat will feature six themed zones, new options for entertainment and dining, new art on its hull, and even a roller coaster on the top deck. If reading about that makes you want to try it out, think about how much it appeals to die-hard cruise-lovers.
So how do you take advantage of knowing about this and other new ships on the way for Carnival Corp. as an investor?
Keep up to date with the company’s announcements and have your eye on the stock market around the time they first release bookings for a brand new ship that people are excited about. Chances are, if you time it right, you’ll be able to sell off your stocks at a profit once the new ship gets filled up with bookings.
10. Understanding Carnival Cruise Line Stock Metrics
If you invest in Carnival cruise line stocks, you will receive reports from the company on some different metrics. Understanding these in advance can help you to play your investments smarter.
The first thing to keep your eye on is a dividend, which is issued in a percentage. Suppose the cruise line you own a share in pays out an annual dividend yield of five percent. That means that for every $100 stock you own, you will get five dollars per year back.
These come in the form of cash payments, so you can choose to put them in your pocket or reinvest. We talked above about watching bookings. One way to keep track of this is with the metric known as booking volume. This is simply the number of tickets ordered in a given period.
The last metric to keep track of is the fiscal year. This is important because it is issued in quarters but may have different start and end dates from the actual calendar year. Be aware of the start and end dates for the quarters in Carnival’s fiscal year so you can time your stock movements more effectively.