Is eToro good for long-term investments?
No trader will EVER profit every single week or month, so I highly recommend you take a medium/long-term approach. This requires patience and discipline, but you’re more likely to see better gains over time.
Founded in 2007, broker eToro has more than 13 million users in 140 countries worldwide — and the U.S. is now on that list. The broker made its name through its social investing platform, an innovative tool that allows users to copy the trades of other investors. Not only can members of eToro open and close their own positions for assets such as currencies, stocks, cryptocurrencies, and ETFs, they can also mirror other members by automatically copying trades.
eToro offers both short and long-term options for traders, all accessible through the CopyPortfolios™ service which allows traders to set up a diversified portfolio.
Is eToro right for you?
If you're looking to grow your wealth over a longer-term time frame, so yes, you can form a long-term investment portfolio, at a low cost, through eToro. When you invest with a traditional broker, you first pay commission which eats into any potential gains — meaning that you will lose a part of your profits before you have even begun trading. With eToro, you won’t pay any markup on the shares you buy, so that the commission stays in your pocket, instead of going to your broker.
Which stocks should you choose and how to buy them?
I cannot offer specific investment advice. All I will say is that it pays dividends to do your homework, read the news frequently and listen to earning announcements. Only invest in stocks or companies that you believe are in a strong and healthy position to resist market shocks, and ultimately have room to grow.
Let’s pretend we want to buy some Apple stock, say $50 worth. Click on ‘AAPL’ (this is the ticker used for Apple on the stock exchange) and you will first see the ‘Feed’. This displays all the latest news and insightful discussions surrounding the Apple share price and the company’s activity in general. Click 'Chart' to display a chart showing the company’s stock prices over the last year. You’re able to change the period shown by zooming in and out.
If you want to invest in Apple (on the basis that you believe the share price will rise over the medium/long term), click on ‘Trade’ in the top right corner. The minimum amount to trade is $50. Below this, you can set the amounts at which you automatically want to close the trade, for both loss and profit.
Finally, take note of the "Leverage" figure. The number refers to how much you can multiply your gains (and losses) by. The higher the number equals higher risk. X1 is essentially buying the real stock. If you traded at X2, any price movement is magnified by 2 (doubles). Usually it's automatically on X5, so for beginners I'd suggest clicking on the number and reducing it to X1.
When you're ready click 'Set Order'. That’s it! You’re now invested $50 in Apple.
