How to invest in Google from the UK

Google business model

Google is the most used search engine and the most visited website worldwide, performing an average of three billion searches per day. But it is also one of the largest software and electronic services companies in existence for a long time.

Like other Internet companies, Google was born as a university project in 1996 by students Larry Page and Sergey Brin. Two years later, in 1998, the two founded the company Google Inc. and the search engine was launched on September 27.

At that time, it was just a search engine with an infrastructure of 80 servers in a closet. However, its initial success was so great that by the year 2000 it had already displaced the most popular search engine at the time, AltaVista.

Since then, Google has only grown to become the technological giant we know today. From just a search engine and generating revenue from internet advertising, Google evolved to offer a wide variety of services among which we can mention:

  • YouTube
  • Google Chrome
  • Android OS

And we mention these because they are the ones that generate the most revenue for Google, revenue that comes from the advertising model that we all know. But there are also lesser-known projects that also generate revenue to the company, such as Google Drive, Workspace or Cloud.

Future projects of Google

Being a technology company, Google remains in a process of continuous research and development that sustains its success in the market. This is how Google has a laboratory known as Google X in which it works on new technologies.

In this laboratory, Google develops technology that may seem futuristic, such as the Smarty Pants, which are robotic pants controlled by artificial intelligence that will help people with reduced mobility.

Following the futuristic line, we can also mention the Wolverine project. In this case it is a device that would improve the hearing of any person. You will probably think that there is nothing futuristic about this, but the magic lies in the device's ability to focus on a particular speaker in a crowded environment.

These are projects that are ongoing, but to mention something more rational and company-related, there is the Taara project. This project seeks to bring the Internet to everyone using beams of light instead of wires. And according to the company itself, this technology is the only one that has the potential to surpass Google Fiber.

This is the way Google has kept growing over and over and that has allowed it to remain in the group of the big five of technology, along with Facebook, Amazon, Microsoft and Apple.

What financial assets can you trade?

About Index Funds

This is the best option for people who can invest in the long term, mostly for those who are starting to trade, because it is inexpensive, diversified, and safer.

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.

In practice, if a fund manager achieves to beat the market, it is only for a short period or on a specific occasion. Or perhaps they would charge very high fees and indexing would be a better decision anyway.

Index funds offer solutions to both concerns: their rates are minor and in the long term they almost always beat active managers.

What are ETFs?

Exchange-Traded Funds or ETFs are a type of passively managed fund, similar to index funds. They can be described as a combination of stocks and mutual funds. They are traded in the market like stocks, during the day. Their advantage is that they are more diversified compared to stocks, and have lower fees.

Forex trading

What is known as Forex trading consists in the exchange of currencies. Put differently, is the conversion between currencies, and the aim is, evidently, to obtain a benefit out of this.

If you want to trade euros and dollars, you speculate how many dollars it will take to buy a euro, with the expectation that after buying the first currency (the euro) it will raise its price compared to the second (the dollar), to make a profit by selling it. Let's say you entered when the price of one euro is 1.10 USD and you exit when the price has gone up to 1.15: thus, you will gain that margin.

Perhaps you already deducted this, but this type of trading requires large resources, since variations are normally low, or using a lot of leverage, which is always a risk. If you are new to the world of trading, we don't recommend beginning with this market, because it is very risky and complex.

The most usual currency pairs are available on this broker but bear in mind that this market works through contract for differences, so you will not be the owner of the real asset.

About Contracts for Difference

It is possible that you have seen the initials CFD repeatedly if you already accessed this broker. Before we explain what this is, you must know that cryptocurrency trading on the platform is only CFD if you are short-selling.

For the record, and in case you are considering day trading cryptocurrency or other advanced operations, you will also find out about concepts such as going short and leverage.

this broker allows you not only to bet “in the black”, but with CFDs you can also bet “in negative”. Let's say that you have the conviction that the Google will fall, so you clearly think “if it is going to depreciate, I'll just wait and bet when it has gone down”. But if it really falls, it might mean extra money for you.

You can do by “going short” which consists in something like this:

  • You ask for a loan of, let's say, 100 units of Google, which cost $ 5,000 at the moment (these figures are made up)
  • You make $ 5,000 by selling the 100 units
  • The Google devaluates from $ 50 to $ 30
  • You purchase the 100 units again, but at $ 3,000
  • Then you return the 100 units
  • The rest is yours, so, you will have made $ 2000

It is far more simple than it may seem. Just keep in mind that by trading in Google on this broker, with CFDs you can make a profit if you anticipate downs in the price.

Trading with leverage

Do you know what leverage is? Just in case, we'll put it simply: trading lets you invest higher figures than you can have in a given time. For instance, if you have $ 100 and you use x2 leverage, you will be actually investing $ 200.

About leverage, Take Profit and Stop Loss

Assuming that, for instance, you are sure that Google price is going up, and that you have $ 1,000 for “going long”, you must know that you can increase your investment and earn higher profits.

You could consider requesting a loan, but it is a process that takes time, and by the moment you receive the money, Google might be already at a much higher price, so you wouldn't be able to invest the way you planned.

Leverage is just like a loan, but it is only a few clicks away! You will be able to invest (and earn) much more money than what you have on the platform's wallet. You will simply see the different options as in the screenshot:

apalancamiento

Within other markets, the leverage you can choose is higher. The reason is that cryptocurrencies are a value that is invested in the medium-long term, and leverage is used mostly for short-term operations or day trading. Let's talk a bit more about how leverage works.

You begin with $ 1,000 and decide to use leverage x2, which means you would have $ 2,000 to invest, since the broker would put the other $ 1,000.

A week after that, Google price rises up by 20% and now your investment costs 2,400. But you don't want to be too reckless, so you decide, wisely, to sell back.

Obviously, the 1k $ from leverage will be deducted, and you'll have $ 1,400 left, of which $ 1000 is the money you put in yourself, so you'll have earned $ 400.

As you can see, with $ 1000 you get $ 400 more, no less than a profit of 40%. That's not bad at all, right?

Does it sound too good? The thing is, it can also play against you. If everything goes according to plan and the price goes up, you will make more money in less time; however, if the value of the asset goes down, you will also lose more in less time.

Let's imagine that the asset didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but double, $ 40. Because of that, the terms “Take Profit” and “Stop Loss” are fundamental when using leverage.

Take Profit is a trading limit you can set for your assets: you ask the platform to sell them once they get to a point above the entry price. For instance, you can buy Google shares at $ 100 and ask your broker to close your position automatically when it reaches $ 120. It is very helpful to avoid being blinded by greed: a 20% profit is usually very good, but once you see the price has risen, you might think you can make higher profits, which is not always the case. Consequently, you might lose money if you don't close on time. So, Take Profit helps you reduce risks when trading.

Stop Loss is even more important, particularly if you use leverage, because a reduced loss with leverage can have a significant impact on your wallet. For that reason, it is essential to mark a Stop Loss more tight than that suggested by your broker.