Why invest in eToro? (Introduction)

Globalization and technology have brought a lot of things to the world. Now, in the Internet age, we can invest in offshore markets as the New York Stock Exchange, London Stock Exchange, etc. This is made possible by online platforms we know today. One of the global online trading platforms we know today is eToro. What is the eToro? It is an online trading platform for trading stocks, indices, commodities, currencies and crypto assets. For more introductory information on what is eToro see this link --->>> https://www.etoro.com/about/

eToro is already gaining traction from investors all over the world. In the Philippines, more and more Filipinos are already adopting to global markets through this platform. Unlike in the normal investment products in the Philippines (purely stocks and bonds, few ETF), eToro offers flexibility and access for Filipinos to trade other types of products such as stated above (commodities, currencies and crypto assets). People can trade USD, GBP, oil, gold and other commodities to name a few. eToro can also offer volatility to traders by using leverage. This is known as contracts for difference or CFD. This is a riskier product but offers greater returns than just buying the underlying stock. This is a type of derivative. A derivative is a type of asset which generates return from the movements in the underlying. Simply put, a CFD is a bet on the movements of a stock. Unlike the typical means of investing where you "buy low, sell high", CFD offers sideways return. This means you can earn by betting on whether the stock will go up or go down. Under a CFD, you don't own the stock (or the underlying). You just own a contract where you bet that the stock will go as planned according to your bias. Why is it leveraged? Leverage is a commonly-used term in finance where you amplify your risk, in order to amplify your earnings. Say if you have a $500 investment in an AAPL (Apple) stock, you can opt to amplify your earnings by "borrowing" additional funds from eToro. This is a common method of margin trading. You can double your funds say, make it $1,000 so that you can buy more of AAPL stocks. However, you will incur "interest" from CFDs which is computed based on the number of units of the stock you own and the length of time the trade is open. We will talk more about CFD trading in future posts.

Another reason why we should invest in eToro is the CopyTrading system. This is one of the many social trading platforms out there which offers a functionality where you can just merely copy the portfolio/positions of other traders (Copied Trader). The Copy Trading functionality is beneficial to the Copier because his/her funds can be managed by the Copied Trader through his/her positions. This can also be beneficial to the Copied Trader if he/she applies for the Popular Investor Program. Below are the benefits of the Popular Investor Program. For further information on the Popular Investor Program see this link --->>> https://www.etoro.com/en/popular-investor/

This Popular Investor Program is one of the many benefits of this platform because you get a chance to be a fund manager even if you don't have the necessary certification or a complete financial background. Also, you don't need to wear formal business attire just to meet your "clients" because everything is done virtually (in case you may want to interact more with your Copiers). Internet, smartphone, laptop/computer, a moderate amount of capital and a positive outlook towards investing/trading is what you only need to succeed as a Popular Investor. 

Another reason why we need to invest in eToro (well even in other international online trading platforms), is that we can invest if the Stock Market in the Philippines is uncertain. As of this writing, the Philippines is still a Net Foreign Selling. What does this mean? This means foreign investors are avoiding Philippine stocks because of the uncertainty of the Philippine market brought about by the COVID cases. This is a great opportunity to first look for markets outside the country where there is a greater opportunity for faster recovery. Of course, this depends on your risk profile and appetite. If you are a long term investor, you might not accept this reason but if you are a swing trader or day trader, international markets offer a lot of opportunities for greater returns.

Hope you learned something from this post! Stay tuned for more!

-C. Cambaling