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How to buy
If you live in Kenya, the best way to invest in Xiaomi shares is, definitely, 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.
Then 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.
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 Xiaomi 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 “Xiaomi” 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.
Xiaomi business explained
Xiaomi Corporation is a company of Chinese origin in the technology sector that manufactures and markets electronic equipment, the best known being its smartphones. But what really makes Xiaomi famous is the “value for money”, being Xiaomi itself that defines itself as “a global company that manufactures quality products at honest prices”.
It was founded in 2010 by Lei Jun and Lin Bin, with 2011 being the year when they launched their first smartphone in the Chinese market. This was the first big step of the company that from that moment on would have a history full of successes. And perhaps the first milestone was in 2013 when it surpassed Samsung and Apple in sales for the first time in China.
And since then, the company's commercial success internationally has been an outright affront to other smartphone manufacturing companies. Especially as Xiaomi's market share grows year after year, snatching space from Samsung and Apple.
The Xiaomi model
On several occasions, one of Xiaomi's founders (Lei Jun) has stated that the company prices smartphones only slightly above the manufacturing cost price. And it does this without sacrificing the quality of the components, offering a high quality product at low prices compared to other brands.
And this translates into a volumetric sales strategy, i.e., offering quality at a low price to sell more and thus make a good profit. This model, although it may seem simple and trite, has worked so well that its market share is growing by 16% annually. In the European market, this growth has reached more than 50%.
Despite this, and the fact that more than 90% of its revenue comes from the sale of mobile devices, the company continues to categorize itself as a software and internet company. This has generated criticism of Xiaomi from Samsung and Apple for “not generating innovation” in any area.
Depending on who looks at it, the latter may or may not be true. But what is absolutely clear is that Xiaomi offers equipment with the same features of high-end equipment from other brands at a price up to more than 3 times lower, which has guaranteed its commercial success.
Finally, Xiaomi does not use traditional advertising media and focuses on social networks. In addition to building customer loyalty so that they are the spokespersons of the brand. Very similar to what other brands do, isn't it?
The fact is that, regardless of the criticism, Xiaomi is an established company with a business model that has given it such strength that it is practically impossible for Xiaomi to disappear in the future.
Why do we recommend it?
- It takes other traders successful investment strategies so you can copy them
- Admits “shorting” or short-selling
- It's uncomplicated and user-friendly
- eToro offers leverage
- There are uncountable investment opportunities
Official page in English: www.etoro.com *
In case you are considering it, eToro is probably the best option to invest in Xiaomi from Kenya.
“Social trading”, a relatively new investment method that consists in replicating techniques and strategies from other experienced investors, has become trendy because of eToro.
If you are a novice user or do not have much investment experience, eToro is very useful. You can rest assured that you will be making a smart investment since the site replicates those from subjects with a long profit record. Additionally, in case you are an investor, the platform pays for your knowledge.
It is also very convenient how accessible is this platform, perfect for new traders who are taking their first steps in the investment world.
What are the assets you can trade in eToro?
Besides stocks, there are other financial instruments you can trade with in eToro.
Commodities (raw materials)
Most people invest in raw materials because of their stability. While other assets present higher fluctuation, commodity prices vary less and offer safety against inflation or market volatility. Nevertheless, prices are subject to supply and demand, so if the fear of possible inflation produces greater demand for a certain good, the price will also rise.
Remember that the only intended income from the investment in raw materials will come from their further sale because these kinds of assets don't pay dividends.
Commodities can be divided into two main types: hard raw materials and soft raw materials. The former include precious metals (such as gold, silver, copper, and platinum), industrial metals (for instance, iron, nickel, or aluminum), and oil; while the latter are agricultural products as sugar, coffee, corn, soy.
About Index Funds
This is the best option for people who can invest in the long term, mostly for beginners, because it is less expensive, diversified, and safer.
Perhaps you have a different idea, but it is very hard to beat the market (yes, you have surely heard of investors who achieve huge returns).
But besides Warren Buffett and a couple more, all that glitters is not gold: if you hear of someone who has beaten the market, they have probably done so for a short period, or the rates are so high that it ends up being better for you to index (whit minimal commissions). Also, past performances do not ensure a future one.
The good thing about index funds is that they solve those two issues: their rates are insignificant and they beat active managers almost all the time, although in the long term.
About Contracts for Difference
If you have entered eToro previously, you probably realized that the acronym CFD appears frequently. Before we explain what this is, we must say that CFDs on eToro are only possible if you go short.
FYI, and if you want to know about day trading cryptocurrency or other advanced trading operations, later on you will also meet concepts like leverage and “going short”.
eToro allows you not only to bet “in the black”, but with CFDs you can also bet “in red”. For instance, you are sure that the Xiaomi will fall, so perhaps you consider that the best thing to do is refrain from getting in until it does. But if it really falls, it might mean extra money for you.
You can do that by “going short”. Here's how it works:
- Someone lends you, for example, 100 units of Xiaomi, with a total value of $ 5,000 (these are completely fictional numbers)
- You earn $ 5,000 by selling them at their price at that moment
- The Xiaomi devaluates from $ 50 to $ 30
- Again, you purchase the 100 units, but now their value is $ 3,000
- Now you give back the 100 units
- The difference is yours, so, you will have earned $ 2000
Consider that it sounds much more complex than how eToro CFDs actually work: we can just say that by trading in Xiaomi you can also earn money if you foretell the downs.
Differences between futures and CFDs
If you are interested, next you have some major differences between CFDs and Futures:
- Futures: the counterparty is another investor or trader.
- CFDs: you don't operate with someone else, the counterparty is the brokerage.
- Expiry date:
- Futures: they have an expiry date. When that moment arrives, your operation is ended even if you are in losses.
- CFDs: they do not have an expiry date. It is possible to wait until you rise up and then exit.
- Futures: there are fewer options for investment
- CFDs: there is an enormous amount of options for trading
- Minimum investment amount or “trade size”:
- Futures: very high minimum investment
- CFDs: very low
- Cost of trading and charges:
- Futures: as you have to invest more, fees are lower
- CFDs: costs are higher
- Use of leverage:
- Futures: it isn't possible to leverage
- CFDs: it is always possible to leverage
eToro payment methods
Among the payment methods that eToro accepts you will find: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to explain here: making a deposit with eToro is very easy. Just go to “Deposit funds”, type a number and select a payment method from the previous ones.
(Consider that you must be the account or credit card owner, for security policies).
You can start with a $ 200 deposit, and there is a limited maximum for unverified accounts. So, if your intention is to deposit larger sums, you should contact Support to verify your account first.
eToro allows transfers in any currency, but you will have to pay a fee for the conversion to USD. So it is better to use USD from the beginning.
There are many cryptotrading methods: from buying and holding to day trading using volatility of the market in your favor.
In case you are just starting in the world of trading, our suggestion is something in between: when you open your position, set a stop-loss order 15-20% below the maximum price, and let the magic happen.
For example, if you purchase a cryptocurrency at $ 15, it increases to $ 25 and falls back to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will obtain a good profit.
I know it might sound more appealing to sell when the price is at its highest, right before corrections, but that is simply not possible. The mentioned strategy is much more down-to-earth and it can give great results.
Later on, you will be able to apply more sophisticated techniques, like short-selling or using leverage.
How does a demo account work?
If you do not have much experience as an investor, the option to operate in “demo” mode may be useful. You only need to set a virtual account and you will be able to trade with “imaginary” funds.
This can be a great way of practicing before starting to trade with real money. The platform will give you an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you will be able to operate with all the different assets available on eToro, not only with Xiaomi.
The first attempt is not usually that good. But don't worry, since you can ask eToro to replenish the virtual funds to your portfolio.
But keep in mind that you need to be prudent for trading, and demo account trading can have an adverse effect. It is completely different to risk your own money than to operate with virtual funds which loss does not suppose any drama. Besides, using fake money can prevent you from learning to control your emotions, something you should be able to do when trading.
Evidently, the demo mode is kind of pointless if you want to trade in the medium or long-term (with almost guaranteed returns only by replicating an index), since you would be wasting years. Virtual accounts may be ideal for practicing short or medium-term operations.
* 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.