How to Invest in Stocks with eToro
“Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing can be wonderful’.” – Warren Buffett
We all have brands that we trust and feel sentimentally attached to above others. For example, studies have shown that replacing the “Coke” label with a generic label on a can containing the “Coka Cola” beverage made it less delicious to tasters, thereby proving that brand attachment plays an important role in how we attribute value to products.
With the launch of eToro Stocks, eToro is now giving you the opportunity to inject that same “extra value” into your investment experience, by bringing you a wide selection of the world’s most popular lifestyle stocks to invest in.
These are companies that you already invest in every day of your life by purchasing their products, thereby giving you more investment experience with these instruments than any other. The thorough knowledge and trust that you have in these brands, gives you a better understanding of what moves their stock prices, which is a huge advantage for an investor.
And with eToro Stocks, you can invest in fraction shares – which means that you can add your favorite brands to your portfolio by investing as little $50.
Check out our full Stocks selection here
What are eToro Stocks?
When you invest in stocks at eToro, you are purchasing a CFD – a contract for difference. When you enter such a contract, the seller (eToro) is obligated to pay to the buyer (you – the investor) the difference between the current value of a stock and its value when you decide to terminate the contract, i.e. close the position. If the difference is negative (i.e. the value of the stock went down), the buyer is obligated to pay the difference to the seller.
You do not actually own any stock when buying a stock CFD.
The advantage of trading CFDs as opposed to actual stocks is that you are able to choose your investment amount, as opposed being limited by the constraint of the share price. For example: at the time of writing, the price of Apple stock stands at approximately $447, which is also the minimum amount of capital you would need to buy Apple stock. On the other hand, you can invest in an Apple stock CFD at eToro with just $50.
Please note: investing in CFDs carries inherent risk as the stock market is unpredictable and prices can fluctuate unexpectedly. You are advised to take the possibility of loss into consideration when making your investment decisions.