How to invest in JP Morgan from Kenya

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👌Difficulty Low
☢️Commissions Zero
💲Minimum deposit 200$
🪙Instruments: Stocks like JP Morgan, crypto, forex, commodities
⚖️Regulated by: Cyprus Securities and Exchange Commission (CySec), United Kingdom's Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC)
🌐 Official website: www.etoro.com *
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How to buy

If you live in Kenya, a great way to invest in JP Morgan 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 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.

Now check your email inbox: you 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.

How to make your first trade

As soon as eToro has confirmed the receipt of your credit, you just have to search for “JP Morgan” 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.

JP Morgan business explained

JP Morgan is a U.S. financial institution founded in 1871 from which originated the three largest banks in the world: JP Morgan Chase, Morgan Stanley and Deutsche Bank. Currently, when referring to JP Morgan, we are talking about JP Morgan Chase, which was born from the merger between the original bank and Chase Manhattan Corporation in 2000.

Chase Manhattan Corporation also has a long history, dating back to 1824 with the name of Chemical Bank. It was for several periods the largest bank in the United States in terms of both deposits and investments.

Since its foundation, Chemical Bank grew and merged with other banks, and in 1996 it acquired Chase Manhattan Corporation. It kept this name until 2000 when it merged with JP Morgan and formally became JP Morgan Chase & Co.

The merger of these two large banks gave rise to a giant that is considered the oldest financial services institution in the world. In addition to being the largest having as assets the astronomical figure of 3,689,336,000,000,000 dollars, that is, 3.6 trillion.

JP Morgan Chase as an investment

The phrase “too big to fail”, which has economic implications behind it, fully describes today's JP Morgan Chase. It is virtually impossible for this bank to fail, regardless of the state of the economy.

And if it did, it would be immediately bailed out by the U.S. government as has happened with other banks. This is because, given its size, it would have huge implications for the economy as a whole if JP Morgan Chase were to disappear.

However, as we have already said, it is practically impossible for this to happen because JP Morgan Chase, together with the FED, has bailed out other banks. Such is the magnitude and importance of this financial institution.

So, if an investor is looking for a company where his money is safe in every way, JP Morgan Chase is the best possible choice. Because to conclude, the shares of this company have good yields and pay dividends to its investors.

Assets you can operate with in this broker

Besides stocks, there are other financial instruments you can trade with in this broker.

Commodity market

Most investors trade with raw materials due to their stability. While other assets present higher fluctuation, raw materials prices vary less and offer security against inflation or market volatility. Nevertheless, prices are subject to supply and demand, so if the fear of possible inflation provokes higher demand for a certain good, its cost will also increase.

Take into account that commodities don't pay dividends. Therefore, by investing in them you will only have a further profit by selling them back.

Raw materials are generally categorized into hard raw materials, which include precious metals as gold, silver, or copper, as well as industrial metals, and oil; and soft raw materials, which are basically agricultural products, like soy, cocoa, corn, or rice, for instance.

Exchange-Traded Funds

Have you heard about Exchange-traded funds or ETFs? 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 offer much more diversity and the fees are significantly lower.

About Index Funds

If a long-term investment sounds good to you, and you won't need to withdraw your money in five or ten years, index funds can be the best alternative. This kind of investment is also great for beginners since it is safer.

You may think differently, but beating the benchmark is far from being a piece of cake and very few fund managers achieve that, apart from some famous cases, like Warren Buffett's.

In practice, if a fund manager achieves to beat the benchmark, it is only for a short time or on a specific occasion. Or perhaps they would charge very high rates and indexing would be a better decision (with minimal commissions).

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

Forex trading

Forex or currency trading allows obtaining profits by exchanging one currency for another.

In case you want to exchange the EUR/USD pair, you speculate how many dollars it will take to buy a euro, thinking that the euro will increase compared to the dollar. Therefore, if you bought each euro for 1.15 USD and you sell them back when their price is 1.20 USD, that margin will be yours.

You may be thinking by now that trading with currencies requires high investments, and you're right, because fluctuation in prices is never that dramatic, and often you will need to use high leverage (which sometimes can be too much of a risk). Our advice for those starting in the world of trading is to choose another market to begin with, since Forex is risky and complex.

eToro allows trading with the most popular currency pairs. Nevertheless, take into account that Forex trading functions with contract for differences, which means you will not own the underlying asset.

How do Contracts for Difference work?

If you already accessed eToro, you probably noticed that the initials CFD appear repeatedly. Before we come back to this, we must say that cryptocurrency operations on eToro are only CFDs when you short sell.

In case you are interested in day trading cryptocurrency and other advanced practices, you will also find terms such as short-selling and leverage.

Even if you don't have a positive balance, you can still operate on eToro with CFDs. For instance, you are sure that the JP Morgan will go down, so perhaps it is obvious to think “if it is going to depreciate, I'll just wait and bet when it has gone down”. However, if it actually falls, you can earn some money out of that.

You can do that by “going short”. Basically, it functions like this:

  • You ask someone for a loan of, let's say, 100 units of JP Morgan, which cost $ 5,000 at the moment (these figures aren't real)
  • You make $ 5,000 by selling the 100 units
  • The JP Morgan goes from $ 50 to $ 30 (as you thought, it devaluates)
  • You purchase all 100 units once again, but now their value is $ 3,000
  • You return the 100 units to the loaner
  • The rest is yours, so, you will have made $ 2000

Consider that it seems much more complicated than it really is: we can just say that by trading in JP Morgan you can also earn money if you foretell it will go down.

Futures Vs CFD

What are the differences between Futures and CFDs?

  • Counterparties
    • Futures: the exchange is made with another investor or trader.
    • CFDs: the counterparty is the brokerage, in this case, eToro. In other words: you do not “play” against or with another trader but the bank.
  • Expiry date:
    • Futures: they expire. When that date arrives, the contract is closed even if you are in losses.
    • CFDs: on the contrary, there is no expiration date. You can wait for your position to rise before closing.
  • Variety:
    • Futures: there are fewer options
    • CFDs: a lot of variety, there is a wide diversity of CFDs
  • Minimum deposit:
    • Futures: very high minimum investment
    • CFDs: you can start with a small initial amount
  • Trading costs and charges:
    • Futures: as you have to pay more in the first place, fees are lower
    • CFDs: fees are higher
  • Leverage:
    • Futures: you can't leverage
    • CFDs: existing and attainable

How to deposit funds into your eToro account

When it comes to payment on eToro, there isn't really much to say, since it is pretty simple. You only need to select “Deposit funds”, type an amount, and choose the payment option you prefer. You can pay with PayPal (available for some countries), bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.

Remember that for security policies, you need to be the owner of the credit card or the account.

The minimum amount required is $ 200, and there is a maximum limit for unverified accounts. So, if you intend to operate with much more, you will need to verify your account previously.

Finally, know that you can make the transfer in any currency because eToro converts it to USD, although it charges a fee, so it is better to make the transfer directly in USD.

Investment strategies

There are many cryptotrading methods: for instance, you can buy and hold, or you can day trade using price volatility to your advantage.

If you are just starting in the world of trading, I recommend a middle point: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work.

This means that if, for instance, you acquire a cryptocurrency at $ 10, it reaches $ 20, and after that it falls to $ 12, your operation will be closed at $ 16-17 and you will make a pretty good profit.

I know it might sound more appealing to sell when the cost is at its peak, right before corrections, but unless you're psychic, that's impossible. The above strategy is much more realistic and, well applied, it can work very well for you.

Eventually, you will be prepared for applying more advanced investment strategies, such as going short or using leverage.

How to use leverage in trading

Do you know what leverage is? Just in case, we'll put it simply: another good thing about trading is that it allows you to invest more money than you can have in a given time. Let's say that you enter with $ 100 and you choose to leverage x2, the amount of your investment will be $ 200.

Leverage, Take Profit and Stop Loss

Let's say that you are confident that JP Morgan will raise its price, and you consider “going long, but you only have $ 1,000 available. However, you have the option of investing more and get higher profits.

You could consider 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, JP Morgan might be already so expensive that investing wouldn't be convenient anymore.

Using leverage, you can obtain that amount of money just by clicking your mouse. It's just like a loan, but much better: from eToro itself. You will be able to invest much more money than you actually have on the eToro Wallet. It is very simple, before investing you will see the different options as in the image below:

apalancamiento

When trading in different markets you can use more leverage. Why? Because cryptocurrencies are usually medium-long term investments, and leverage is used mostly for day trading or short-term trading. 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 ($ 1,000 are a “loan” from eToro). 
  • A few days later, JP Morgan 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. 
  • The $ 1k of leverage will be deducted, and 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.

But watch out: if everything goes ok and the price rises, you will make money. Nevertheless, 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 decreased 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 using 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 bought JP Morgan shares at $ 100, you program eToro to close once it reaches $ 120. That way, you make sure you won't change your mind 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 using 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. Always remember to establish a Stop Loss more conservative than that suggested by the broker.

How does a demo account work?

If you are beginning as an investor, you can start by practicing with a “demo” option. Setting a virtual account and operating with fictional money is very easy.

real or virtual trading en eToro

A virtual account can help you to practice and gain experience before starting to trade with real money. When you create your demo account, you will begin with a virtual amount of $ 100.000, to operate with a variety of financial instruments available on eToro, besides JP Morgan.

Don't worry, since if you lose all your virtual funds, you can contact support so they can add back the $ 100,000 to your portfolio and you can try again.

Take into account that you should always be cautious when trading, nevertheless, using a virtual account might have the opposite effect. It will never be the same as risking your own money.

As you may suppose, the demo mode is kind of pointless if you want to invest in the medium or long-term (which almost assures you a profit only by replicating an index), since you would be wasting years to see the outcome. Virtual accounts may be helpful for trying out before trading in the short or medium-term.

FAQ

How much is the minimum deposit?
The minimum deposit is 200USD.

When will I be able to withdraw my money?
At any time. You just have to sell your JP Morgan trade, click on “Withdraw Funds” and that's all.

What deposit methods accepts eToro?
You can use: Bank Transfer, Credit Card, PayPal, Neteller, Rapid Transfer, Skrill and Klarna / Sofort Banking.

* 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.