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How to buy
For those who live in Australia, the best way to invest in Walmart shares is, without any doubt, this popular broker.
eToro*, one of the main brokers around the world, is registered and licensed, among others, by the United Kingdom's Financial Conduct Authority (FCA).
We recommend eToro because you can create an account for free with this broker, and its fees for trading online are very low. Besides, eToro is available in our language, accepts users from Australia, it is really easy to manage, and its friendly interface is ideal for those who are starting to trade with cryptocurrencies and stocks.
How to sign up, step by step
The first thing you need to do is click here and fill in the fields on the right: enter your name, email, and set a password.
Now check your email: you should have received an email from eToro, click on “Verify my email” and your account will be verified.
Once on eToro, you just have to click on “Deposit funds”, in the page menu.
There, you can choose how much money you want to add to your account (the minimum is $ 200) and the payment method:
As you can see in the image, the first deposit can be made by credit card, PayPal, or bank transfer.
How to make your first trade
As soon as eToro has confirmed the receipt of your credit, you just have to search for “Walmart” in the search bar, click on “Invest” and choose the amount in dollars you want to invest.
*67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.
Walmart business explained
Walmart, founded in 1962 by Sam Walton, is an American company that owns chains of discount department stores and warehouse clubs. Its main business is the retail sale of mass consumer goods of all kinds.
Its founder, created the company to offer quality products at very low prices in order to obtain a large volume of trade. The idea was to compensate precisely for the low prices so that the company could sustain itself and generate profits.
His idea paid off immediately, because from the very first year, Walmart had a large volume of sales that increased year after year. And along with its sales volume, what also grew year by year was the number of stores the company owned.
Thus, with such a simple business idea, Walmart went from being a warehouse in Arkansas with a few employees, to owning more than 10 thousand stores represented in some 60 different brands in 28 countries and with about 2.2 million employees worldwide.
And this without changing its business model, which is still the same today: sell cheap to sell more. Although what it has done is to reach agreements with manufacturers to provide it with products to market under its own brands.
Walmart and the stock market
The company has been listed on the New York Stock Exchange NYSE since 1970 and since then, as the company's growth and expansion, its share price has not stopped growing. Especially in the last 10 years, when it has experienced a bullish rally regardless of the state of the economy.
Although the truth is that this is very predictable since it is a company that generates and increases its profits year after year. And behind this is the fact that their main source of revenue is what they call “groceries”, which are food products.
Knowing a little of its history and with the awareness that food products will always be the first necessity, it is easy to foresee that Walmart's behavior will remain the same in the future, that is to say, in frank growth.
Therefore, if you are looking for companies to invest in that have a good track record of performance and excellent future prospects, Walmart is one of the companies to consider.
Leverage: more risk, more gains
If you are not familiar with the term “leverage”, we'll put it short. When trading, it's the capacity of enlarging your investment by borrowing money from the broker. That way, if you start with $ 100 and you use x2 leverage, you will be investing $ 200.
Why using leverage and how to do it
Assuming that, for example, you are positive that Walmart price is going up, and that you have $ 1,000 for “going long”, you must know that you can increase your investment and make more money.
Perhaps you could go to your bank, request a credit, put an asset as collateral, wait for it to be accepted and receiving the money, and then acquire Walmart… But by that moment it is likely that your prediction was confirmed a long time ago, and Walmart would be already so high that it is not worth investing.
Leverage is like a loan, and you will only have to click a few times! You will be able to operate with much higher amounts than what you actually have on the platform. Before trading, you will find the leverage options as in the screenshot below:
Within other markets, the ability to leverage is greater. This is because cryptocurrencies are a value that is invested in the medium-long term, and leverage is used especially for day trading or short-term operations. Let's talk a bit more about how leverage works:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 are a “loan” from eToro).
- A few days later, Walmart price does rises, as you assumed, and now the price of your investment is $ 2,400 (20% more), so you decide to sell back because you want to play it safe.
- Once the $ 1k from leverage is deducted, you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours from the beginning.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment.
It may sound too good to be true. The trick is that the risk of losing out also increases. If everything goes as planned, you will earn more money in less time; however, if the value of the asset goes down, you will also lose more in less time.
For instance: if the price falls by 10%, you do not lose $ 10, but twice (the leverage) that figure, that would be $ 20. That is why the terms “Take Profit” and “Stop Loss” are so important when operating with leverage.
Take Profit is used as a form of reducing risks when trading. When you enter, you can set a profit limit and ask that your position is automatically closed when the asset reaches a price.
If you purchased Walmart shares at $ 100, you request eToro to close your operation when it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps rising, which could make you lose it all.
Also, if you use leverage you absolutely need to place a Stop Loss order (take into account that any small loss is greater with leverage). That is why it is vital to set a Stop Loss lower than that suggested by the platform.
What assets can you trade in eToro?
You already know about stocks, there are a few more financial instruments you can trade with in eToro.
About Index Funds
If you want to invest in the long term, and you won't need to take back your money in at least five years, index funds can be the best choice. This kind of investment is also great for beginners since the risks are lower. Besides, they offer more diversity.
Contrary to what it may seem, very few investors can beat the benchmark (although you have probably heard of investors who obtain huge returns).
But putting aside some remarkable cases (like Warren Buffett's), all that glitters is not gold: if you hear of someone who has beaten the market, they have probably done so for a short time, or charges so many commissions that it ends up being better for you to index (whit minimal commissions). Also, take into account that past performances do not ensure a future one.
The great advantage of index funds is that they solve both issues: their commissions are minor and they regularly beat active managers, but in the long term.
Exchange-Traded Funds or ETFs are a kind of passively managed fund, similar to index funds. They can be described as a combination of stocks and mutual funds. They can be traded like regular stocks, but include a wide diversity of assets and their commissions are much lower than those of an actively managed fund.
There are different methods or ways for crypto trading, like buying and holding or day trading (and using price volatility in your favor), for naming just a few.
My suggestion for those who are beginning to invest is going for a middle point: placing a dynamic stop-loss (15-20% under the highest price) when you open your Walmart operation and wait for it to work on its own.
For instance, if you buy a cryptocurrency when its price is $ 15, then it increases to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Therefore, you will obtain a good profit.
You may be wondering: why not selling back when the cost is at its maximum? But that would only work for a psychic or a fortune-teller. The mentioned method is completely realistic and can work out perfectly.
Later on, you will be able to apply more complex strategies, such as using leverage or going short.
Demo account: How does it work?
For those who still don't have much experience in investing, using a demo account can be very helpful. You just need to set the virtual mode and you can start practicing with a “fictional” balance.
A virtual account can be a good way of practicing before starting to operate with real money. When you create your demo account, you will begin with a virtual balance of $ 100.000, to trade with a variety of financial instruments available on the platform, besides Walmart.
The first attempt is not usually that good. But don't worry, because you can ask support to deposit back the virtual $ 100k to your portfolio.
But remember that trading is mainly about being prudent, and using a practice account can have an adverse effect. It is completely different to risk your own money than to trade with a false balance that you don't mind losing.
As you may suppose, if you are interested in trading in the long or medium-term, it makes no sense that you try the demo mode and waste years waiting to see the results. But it can be ideal if you want to practice short and medium-term investment.
Have you heard about “social trading”?
eToro was the first platform that proposed social trading, and this new concept turned out to be brilliant. Lots of other brokers copied this idea, but eToro is still the best.
But it wasn't just about creating yet another social network to talk about investment. The real achievement was in the possibility for users to replicate the moves of advanced investors, who were in turn paid for their ideas.
In the left menu of the site, you will see “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” are a kind of portfolio that bundles a number of financial assets in a certain sector. Let's say that you consider that the gaming sector is going to prosper shortly but you don't know enough to start choosing stocks (or you don't have time), you just have to invest in the CopyPortfolio “InTheGame”, which includes companies like Microsoft, Google, Tencent, NVIDIA, Logitech, Intel, AMD, Nintendo, Ubisoft, Unity…
At the time of writing this article, this CopyPortfolio has generated a 100% profit in the last year, and the only thing you have to do is to click on “Invest”, select the amount, place the stop-loss and wait.
But you can also copy other successful traders of the site. It is really easy: you can find them with “Copy People” and just duplicate their moves.
In the profile of each user, you will see their risk profile (the higher the risk, the more chances of winning more and losing more), their performance history, and the type of assets they operate: shares, forex, cryptocurrencies, commodities….
And although copying other people's strategies is very interesting, it is also a good idea to take advantage of the platform's community to read other users and learn from them. It is a great source of information and knowledge, especially if you intend to turn investing into a lifestyle.
* Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Disclaimer: 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.