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How to buy
For those who live in Kenya, a great 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 Cyprus Securities and Exchange Commission, and therefore complies with all the regulations of the European Union, the most demanding in the world.
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 your language, accepts users from Kenya, 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 button 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 purchase
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.
What does Johnson & Johnson do?
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.
eToro, our recommended broker for purchasing Johnson & Johnson shares from Kenya?
- There are lots of investment options
- You can leverage
- It is really straightforward and intuitive
- It uses techniques and moves from experienced traders so you can emulate them
- Allows short-trading
Official homepage: www.etoro.com *
You should consider eToro in case you are thinking about investing in Johnson & Johnson from Kenya.
eToro is well-known for making “social trading” fashionable, an ingenious way of investing in which traders can repeat the strategies of other investors who have been generating income for years.
If you are a novice user or haven't gained much experience in investments, eToro is very helpful, since it automatizes your investment by imitating moves from those who have been doing it for years. And for those skilled investors willing to share their techniques with others, eToro rewards your knowledge with money.
Besides, the interface of this platform is amazingly intuitive, great for users who want to begin in the stocks world, without getting crazy with tons of diagrams and numbers.
What are the instruments you can trade in eToro?
We already know about stocks, there are other financial assets available.
What do you know about Exchange-traded funds? They are similar to index funds and are known for merging the advantages of stocks and mutual funds: they can be traded regularly at market price, but include a much wider diversity of assets and considerably lower rates.
The major benefit of trading with raw materials is that prices are more stable than those of other assets. In fact, their stability is what makes most investors trade with commodities when facing market volatility or inflation. Still, the cost of commodities is determined by supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Consider that commodities don't pay dividends. Therefore, the only potential further earnings would come from a sale of the asset.
There are two main types of commodities: hard raw materials and soft raw materials. The former are precious metals (such as gold, silver, copper, and platinum), industrial metals, and oil; and the latter are agricultural products, such as wheat, soybeans, vegetables, or even dairy.
Forex or currency trading is the exchange between a pair of currencies in order to obtain a profit through the operation.
If you decide to trade euros and dollars, you speculate how many dollars it will take to buy a euro, with the expectation that the first currency (the euro) will revalue compared to the second (the dollar), to make a profit by selling it. Assume you entered when the price of one euro is 1.10 USD and you close when a euro is worth 1.15: that difference is yours once you sell again.
Perhaps you already deducted this, but this type of trading usually implies investing a lot, because prices rarely increase that much, or using a lot of leverage, which is a bit like skating on thin ice. Our advice for those who are new in the world of trading is not to start with Forex, but with a safer and simpler market.
eToro allows exchanging the most known currency pairs but remember that Forex trading works through CFDs, thus the underlying asset won't be yours.
About Contracts for Difference
It is possible that you have seen the acronym CFD more than once if you entered eToro before. We will come back to it, but you should know first that CFDs on eToro are only possible if you short sell or choose leverage higher than x2 (and the platform does not even allow this).
We will also refer to concepts like leverage and “going short”, in case you are interested in day trading cryptocurrency or other more advanced practices.
eToro lets you bet both “in the black” and “in negative”. Let's say that you believe that the Johnson & Johnson will go down, so probably you consider that the best thing to do is wait until it does and then go in. Nevertheless, if you really think that it's going down, why not take advantage of that?
You can do that by “going short”. Here's how it works ,roughly:
- You ask someone to lend you, for instance, 100 units of Johnson & Johnson, which total value at the moment is $ 5,000 (obviously, these figures are made up)
- Next, you make $ 5,000 by offering them at the market price
- As you supposed, it depreciates, and the unit of Johnson & Johnson now costs $ 30 instead of $ 50
- You get the 100 units again, but at $ 3,000
- You return the 100 units to the person that loaned them to you
- The difference is yours, so, you will have earned $ 2000
It is far more simple than it may seem. Just remember that by trading in Johnson & Johnson on eToro, with CFDs you can make a profit if you anticipate downs in the price.
How does eToro work?
We said before that eToro is very easy to manage. Anyone can start investing without previous experience or long explanations.
You won't have any issues with the interface if you are familiar with any other social network.
Now we are going to walk you through the sign-up process and the different sections of the page that you should familiarize yourself with.
When you register, you will have to fill in all the information that eToro asks for: first and last name, address…
Additionally, you will see that they ask you some questions about your experience as an investor.
However, it's not like they're testing you or anything. It is only a way of finding out how much knowledge you have and what type of financial instruments they can recommend. For example, if you have never invested before, they will not recommend that you invest in futures.
Let's review the different tabs of the platform.
“Set Price Alerts” allows you to set alerts on the price of certain assets. It is a very useful tool for when you want to purchase an asset that is falling, but perhaps you think that it will decrease even more.
In the “News Feed” tab is the most social part of eToro: where users are interacting all day and sharing opinions, tips, and other valuable information.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the kinds of assets that are available on eToro:
- Forex trading
- Index funds
In the section “People”, you will find the profiles of eToro users and their past performance. This is where the term “social trading” makes sense since you can duplicate the strategies of your preferred investors.
In this section, you will be able to find those users that you find more interesting. You can apply filters like country, average profits, or financial market. When you select an investor and indicate how much you want to invest, eToro will automatically replicate their movements, in proportion. For instance, if you have $ 1000 and the user puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same asset, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are “Top Trader”, “Market” and “Partner”.
Sometimes it might be better to copy from CopyPortfolios than to individuals, since the former offer more diversity. The portfolios are identified so you can recognize them easily: one about gaming, another about large drone companies, another about pharmacy … You think that a certain sector is going to succeed anytime soon? Then look, because surely there is a CopyPortfolio about it.
Do you know what “social trading” is?
The first platform that conceived trading as a social activity was eToro, and the idea spread like wildfire. Other brokers have also taken this concept, but we have tried them all and eToro is way better.
But it wasn't just about creating yet another social network to talk about investment. The main achievement was in the possibility for users to copy the strategies of advanced investors, and to reward the latter for their ideas and knowledge.
It sounds complicated but it isn't: when you enter eToro you will see in the menu on the left the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” contain a collection of financial assets of a certain sector. For instance, if you anticipate that a particular sector will succeed in the near future but you are not sure which investments to make, you just have to pick a portfolio that groups together a variety of related companies in that industry.
You should know that in the past twelve months, CopyPortfolio has given returns of 100%. And you can benefit from it just by choosing a portfolio, enter your chosen amount, place the stop-loss and click on “Invest”.
The other option is to directly copy traders of the platform: in “Copy People” you can locate eToro users who are very successful and whose strategies you can replicate very easily.
You will see in the profile of users: the type of assets they operate with, their risk profile (a higher risk implies more chances of earning more or losing more), as well as their performance history.
Besides duplicating other investor's moves, which is really interesting and helpful, we also suggest that you make the most out of 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.
How to use leverage in trading
If you still don't know what “leverage” is, we'll describe it briefly. When trading, it's the capacity of increasing your investment without putting extra money. For example, you can enter with $ 100, but if you use x2 leverage, you will be investing $ 200.
About leverage, Take Profit and Stop Loss
Assuming that, for instance, you are sure that Johnson & Johnson price is going up, and that you have $ 1,000 for “going long”, you should know that you have the option of investing more and making more money.
You could consider requesting a loan, but you must know that all the process takes time, and when you receive the money, Johnson & Johnson might be already at a much higher price, so you wouldn't be able to invest the way you planned.
With leverage, you can get that amount just by clicking your mouse. It's like borrowing money, but much easier and quicker, and with the benefit that you will be getting it directly from eToro which will let you invest much more than you have on the wallet. Before trading, you will be able to choose between the different leverage options as in the image:
When operating in different markets you can use even more leverage. The reason is that cryptocurrencies are a value that is invested in the medium-long term, and leverage is used mainly for day trading or short-term operations. That said, I'm going to explain better how leverage works:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 was borrowed from eToro).
- A few days later, Johnson & Johnson price does increases, as you thought, 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 deducted, you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours from the beginning.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
Does it sound too good? The thing is, you can also lose. If everything goes according to plan and the price goes up, you will earn more money in less time; but if the value of the asset decreases, you will also lose more in less time.
Supposing that the price didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. For that reason, the concepts of Take Profit and Stop Loss are fundamental when operating with leverage.
Take Profit is an automatic order of selling once the asset achieves a certain price: you purchase Johnson & Johnson shares at $ 100 and you ask eToro to automatically close your operation as soon as the price goes up to $ 120. It is very helpful to avoid being blinded by greed: we would all take a 20% profit when making the investment, but when you reach that 20% it is easy to want higher profits and risk losing it all. It's like you got assured in advance of not doing anything dumb in the future.
On the other hand, when operating with leverage you should always use Stop Loss, because a small fall in the price of an asset can have a big impact on your wallet. For that reason, it is vital to set a Stop Loss lower than that suggested by the platform.
* 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.