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How to buy
For those who live in Egypt, the best way to invest in Johnson & Johnson 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 Australian Securities and Investments Commission (ASIC).
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 Egypt, 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.
Then check your email inbox: you should have received an email from eToro, click on the link 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.
If you have a choice, we do not recommend bank transfer because it takes longer, and it can be very frustrating to see the price of Johnson & Johnson rising while you wait for your transfer to be done.
How to make your first trade
When eToro has confirmed the receipt of your credit, you just have to search for “Johnson & Johnson” 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.
Johnson & Johnson is one of the largest and oldest American companies. It was founded in 1885 by Edward Johnson along with brothers James and Robert Johnson, taking their surnames as the company name. Since then, the company has grown to the point that Fortune magazine ranks it among the 100 largest companies in the United States.
Initially, the creators' idea was to manufacture and market a line of ready-to-use surgical-grade bandages. But as time went by, Johnson & Johnson added more products to its catalog, although always related to the health area.
This is how it went from bandages to produce a wide variety of items that can be framed in pharmaceuticals, medical devices and consumer goods. All this is marketed around the world with its more than 250 subsidiaries that are located in 60 countries and distribute to the rest.
Of the product categories mentioned above, pharmaceuticals are the ones that generate the most revenue for Johnson & Johnson, representing 50% of the total. This is followed by medical equipment with 33% and consumer products with the remaining 17%, which are marketed under the Johnson's brand.
In addition to the above, another important aspect of this company is that more than 50% of its revenues come only from the United States. Some 23% comes from Europe, 18% from Asia and Africa and 7% from the Americas, excluding the United States. This gives us an idea of how important the American market is for the company.
Johnson & Johnson for investors
If there is a perfect stock it would be Johnson & Johnson for several reasons. The first is that it is one of the most solid and consistent companies out there today. Also, as we mentioned, it is among the largest in the United States.
Another important point is that its share price, although historically not very volatile (which is appreciated), grows year by year. So much so that, if we compare the growth of Johnson & Johnson's share since its foundation with the growth of the SP500, which is taken as a gauge of the American economy, Johnson & Johnson is the winner with a great advantage.
Finally, this company has almost 50 years paying uninterrupted dividends to its investors and this is something that few companies have achieved. To this we must add that they are growing dividends that the last 20 years have increased on average 10% per year. This makes it a must-have stock for any investor.
What are the assets you can trade in eToro?
We already know about stocks, there are other financial assets available.
Have you heard about Exchange-traded funds or ETFs? They are passively managed funds, known for merging the benefits of stocks and mutual funds: they can be exchanged regularly at market price, but offer much more variety and the fees are significantly lower.
In case you want to invest in the long term, and you won't need to withdraw your money in five or ten years, index funds can be the best choice. This kind of investment is also great for beginners since it is more secure.
Unlike a lot of people think, beating the benchmark is far from being a piece of cake and very few fund managers have done it, apart from some famous cases.
If a fund manager brags about having beaten the benchmark, they probably have done it for a chor period or on particular occasions, or sometimes the charges are so high that indexing would be a better decision anyway.
Index funds offer solutions to both concerns: their rates are minor and they often beat active managers, but in the long term.
Forex or currency trading is the exchange between a pair of currencies.
For example, in case you want to trade EUR and USD, you acquire euros and pay with dollars, therefore you hope that the first currency (the euro) will revalue compared to the second (the dollar), to make a profit by selling it. Suppose you entered when the price of one euro is 1.10 USD and you close when the price has gone up to 1.15: that difference is yours once you sell again.
You may be thinking that this form of trading requires high investments, and you are not wrong, since fluctuations are usually minimal, and often you will need to use high leverage (which sometimes can be too much of a risk). In case you are new to the world of trading, it is not a good idea to begin with the currency market, because it is very risky and intricate.
You can trade with almost all well-known currency pairs on eToro. However, remember that Forex functions through CFDs, which means the underlying asset won't be yours.
Most investors trade with raw materials because of their stability. While other assets present higher fluctuation, commodity prices vary less and offer security against inflation or market volatility. Nevertheless, prices are subject to supply and demand in the market, so if an economic situation provokes greater demand for a certain good, the price will also go up.
Keep in mind that the only intended income from the investment in raw materials will be the hypothetical capital gain after selling them: unlike shares, these don't distribute dividends or pay interest.
Commodities can be divided into two main categories: hard raw materials and soft raw materials. The former are precious metals (such as gold, silver, copper, and platinum), industrial metals, and oil; while the latter are agricultural goods, like wheat, soybeans, vegetables, or even dairy, among many others.
How do Contracts for Difference work?
It is possible that you have seen the acronym CFD repeatedly if you entered eToro before. Before we explain what this is, you should know that cryptocurrency operations on eToro are only CFDs when you go short.
We will also refer to concepts like leverage and “going short”, in case you are interested in day trading cryptocurrency or more advanced operations.
Even if you don't have a positive balance, you can still bet on eToro with CFDs. Let's say that you have the certitude that the Johnson & Johnson will go down, so you obviously think “if it is going to depreciate (go down in price), I'll just wait until it does”. But if you are sure that it is going down, why not take advantage of that and making money?
You can accomplish that by “going short”. Here's how it works:
- You ask for a loan of, let's say, 100 units of Johnson & Johnson, which cost $ 5,000 at the moment (these numbers aren't real)
- Then, you get $ 5,000 by offering them at their price in the market
- The price is reduced, as you calculated, and the unit of Johnson & Johnson now costs $ 30 instead of $ 50
- You obtain the 100 units again, but at $ 3,000
- Then you give back the 100 units
- The difference is yours, so, you will have earned $ 2000
It all sounds more complex than it really is. Just keep in mind that by trading in Johnson & Johnson on eToro, with CFDs you can make a profit if you foretell downs in the price.
“Social trading”, an innovative concept
The first platform that thought of trading as a social activity was eToro, and the idea spread like wildfire. Other brokers have also adopted this concept, but eToro is still the leader.
However, their main achievement wasn't just creating a social network for traders. They could have made the umpteenth social network in which users talk about investing, but they wanted much more: the great innovation of eToro was allowing investors to replicate the strategies of other users, who in turn were rewarded for their contributions.
Perhaps it sounds complicated, but it is very simple. When you enter eToro you will find in the left menu the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” are kinds of ETF or thematic index funds, a portfolio that bundles a number of assets in a certain sector. For instance, if you consider that a particular sector will succeed in the near future but you are not sure which investments to make, you just have to select a portfolio that includes a variety of related companies in that industry.
You should know that in the past year, CopyPortfolio has generated returns of 100%. And you can benefit from it just by choosing a portfolio, enter your chosen amount, place the stop-loss order and click on the “Invest” button.
But you can also copy other users of the platform who are successful investors. It is really easy: you can find them with “Copy People” and just duplicate their strategies.
You will see in the profile of each user: the type of assets they trade with, their risk profile (a higher risk implies higher possibilities of earning more or losing more money), as well as their trading history.
Besides copying other user's strategies, which is really interesting and helpful, we also recommend that you benefit from the community by reading other user's remarks. You can learn a lot from their experiences, particularly if you aim to make a living from trading.
There are several ways to trade cryptocurrencies: from purchasing and holding to day trading (and benefit from price fluctuations).
My suggestion for those who are starting to invest is going halfway between the two options: when you open your position, set a stop-loss order 15-20% below the highest price, and let the rest happen on its own.
This means that if, for example, you acquire a cryptocurrency at $ 10, it goes up to $ 20 and then decreases to $ 12, your operation will be closed at $ 16-17 and you will have earned a decent profit.
I know it's tempting to look to sell when the price is at its maximum, right before corrections, but that is simply not possible. The above strategy is much more realistic and, well applied, it can work very well for you.
And when you have gained more experience, you will be ready for more advanced investment strategies, such as going short or using leverage.
How to use leverage in trading
In case you are not familiar with the term “leverage”, we'll put it short. When trading, it's the capacity of multiplying your investment by borrowing money from the broker. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's pretend that you have complete certainty that Johnson & Johnson will raise its price, and you want to “go long”, but you only have $ 1,000 available. However, you have the option of investing more money and get higher profits.
There's the possibility of asking for a loan at your bank or other financial company, but it is a process that takes time, and by the moment you receive the money, Johnson & Johnson might be already so expensive (if your guess was right) that investing wouldn't be convenient anymore.
Leverage is like a loan, but it is only a few clicks away! eToro allows you to invest (and earn) much higher amounts than what you actually have on the platform. Before trading, you will how much leverage to use as in the screenshot below:
When operating with other assets you can use higher leverage. Why? Because leverage is regularly for short-term operations, and cryptocurrencies tend to be a medium or long-term investment. But let's see how leverage works:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 was borrowed from eToro).
- A few days later, Johnson & Johnson price does rises, as you assumed, and now the price of your investment is $ 2,400 (20% higher), so you decide to sell back because you want to play it safe.
- Once the $ 1k from leverage is returned, you will have $ 1,400 left; which means the net profit is $ 400, since the other $1,000 was yours initially.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment. That is pretty good.
But not everything is wonderful. If everything goes ok and the asset increases, you will make profits. On the other hand, if the price goes down, you will also lose more money really fast.
Let's imagine that the price didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. Therefore, when operating with leverage it is fundamental to know about Take Profit and Stop Loss.
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 Johnson & Johnson shares at $ 100, you request eToro to close your operation when it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to wait a bit longer in case it keeps going up, which could make you lose it all.
On the other hand, when operating with leverage you should always use Stop Loss, because a small decrease in the price of an asset can have a big impact on your wallet. You always need to establish a Stop Loss more conservative than that suggested by eToro.
Frequently asked questions
* 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.