Investing in the stock market can sometimes be challenging to get into. Lots of complicated terms are used, and you don’t always know where to start.
Fortunately, investing today is easier than ever. By creating an account with an online broker such as eToro, you can start from a low amount (€170) and use the Copy Trading function.
With the Copy Trading function, you can take over the investments of well-known, successful investors. You can see how their assets and investments have performed. This way, you can choose investors who have achieved a lot of results lately!
If you have found a successful investor, you can take over his portfolio at the touch of a button. This allows you to benefit from the knowledge and expertise of the investor!
This way, you can quickly learn how to invest without having much knowledge of investing. Keep an eye on it! An investor who has been successful in the past does not guarantee success in the future.
Step 1: Sign in to eToro
Signing up with eToro is easy. You can create an account using your E-mail address, but eToro makes it extra easy by also offering you the option to open an account with a Facebook or Google performance in one click.
After opening this account, you can get started with virtual money or verify yourself, to begin with, real money. This verification consists of sending a copy of your proof of identity and completing a questionnaire.
create etoro account
Step 2: Transfer money
You will then be notified by eToro when the verification has been approved. From that moment on, you can start using real money with this broker.
You can quickly deposit money into your eToro account via payment methods such as iDeal, PayPal or bank transfer.
The different payment methods also have additional minimum deposits. At iDeal, this is currently a minimum of €170.
ideal checkout etoro
Step 3: Copy an investor
You can easily copy an investor at eToro by clicking the ‘copy investors’ button. Here you can see a large number of investors.
Each investor is ranked based on their historical earnings. You can choose which period you want to analyze the performance of his portfolio.
For example, if you want to copy a suitable investor for the long term, you can look at investors who have performed well in the past year. If you’re going to profit quickly, you can copy an investor who has performed well in the short term.
Note that volatile stocks are riskier. The risk indicator shows the volatility of the portfolio.
Let’s start with the question: what is investing? In simple terms, it is a form of investment. With support, you put your money to work to grow it. This can be done by buying shares, for example, that you think will become worth more so that you can sell them later for a profit.
How does investing work?
When you invest, you are investing in the hope that it will make money. The most popular way to support is through the stock market. You had to go to the stock exchange to trade physically; now, you can easily do that online.
When you start investing, you can choose to invest yourself actively. You then decide which shares to buy and when to sell them again. But you can also choose to leave the investing to an expert. This can be interesting if you have little experience with investing or do not have the time to follow the stock market yourself. Read more about the difference between investing yourself and having them invested.
What can you invest in?
This can be in many different things. Of course, cryptocurrency is in the news these days, and investing via crowdfunding is also becoming more and more popular. Within the investment world, there are several categories in which you can invest. Below we explain the most important ones for you.
Investing in shares
This is what most think of when it comes to investing: investing in stocks. But what exactly are stocks? Shares capture the imagination of many people: you buy a ‘piece’ of a company and then become a co-owner. This means that you share in the company’s profit, which can be paid to you as a dividend. The share price can also rise so that you make a profit on your investment.
Investing in bonds
A lot less known but very interesting is investing in bonds. A bond is a type of loan. Both governments and companies can borrow money from investors through bonds. You receive interest in this. That interest is called the coupon in investment language.
Because in principle, you will get the value of the bond back at the end of the term, unless the company has gone bankrupt, investing in bonds is less risky than investing in stocks. Monday r this also means that, in general, the return on investing in bonds is somewhat lower.
Investing in real estate
Of course, you can buy a house yourself as an investment, but then you need a lot of money or an expensive mortgage. Another option is to invest in real estate via the stock exchange. You then do not buy physical real estate but a share in real estate funds that own real estate themselves. This way, you can also invest smaller amounts.
Investing in commodities
When investing, you may not immediately think of commodities, but gold, silver and oil are popular investments. When you invest in things, you do not own physical items but investment products that derive their value from the price of these commodities.
Read more about investing in commodities.
How do you know what to invest in?
Unfortunately, there is not one investment product that is always the smartest choice for everyone. How much risk you can and want to take depends on your situation. When you start investing at Knab, we determine a so-called risk profile based on a questionnaire. We draw up an investment portfolio for you based on this risk profile.
Risk and return of investing
The difference between the cost of the purchase and the proceeds of the sale is called the return. Of course, every investor is looking for as much return as possible.
In practice, trying to achieve a higher return also means taking more risks. Risk and recovery go hand in hand. If you want to run less risk, you often have to settle for less return.
What is the best way to learn to invest?
The best way to learn to invest is to try it out in an accessible way. This way, you can see if it is something for you without putting in all your savings right away. At Knab, you can invest from € 100.
Another great way to learn how to invest is to learn from other people’s mistakes. One of the common investing mistakes is to put all your money in one stock. Therefore, use the following rule of thumb: you will have to spread them if you want to limit your risks. You can also apply your entry point as an investor, for example, by investing money every month.