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The best way to invest in Amazon from the US is with this popular broker.
It is one of the largest brokers in the world, with more than fifteen years of experience and millions of users.
eToro is a triple regulated broker as it is registered with the Cyprus Securities and Exchange Commission (European Union), the UK Financial Conduct Authority (FCA), and the Australian Securities and Investments Commission (ASIC).
It is the most common platform to buy Amazon shares from the US because it does not charge commissions for trading shares and because you can start with just $ 200.
Besides, it is fully available in several languages, it is very easy to use and therefore ideal for those who are starting in the world of investment.
How to register, step by step
Registering with eToro is completely free, the first thing you need to do is access this page and fill in the three fields: enter your name, your email and set a password.
Now check your email: you receive a message from eToro. Click on the link and your account will be verified.
Now you just have to click on the menu button (on the desktop is at the bottom left) that says “Deposit funds”.
Now you can choose how much money you want to deposit (the minimum is $ 200) and which payment method you prefer:
For the first deposit you have to choose between credit card, PayPal or bank transfer, although the latter takes several days.
As soon as eToro has received your money, you just have to search for “Amazon”, click on “Invest” and choose the amount in dollars you want to invest.
Is investing in Amazon safe?
An advertising campaign that promises generous returns for investing in Amazon is currently circulating in USA, so lots of readers have asked us if it is real or if it is a scam.
The answer is simple.
It is a good idea to invest in Amazon, but you should always do it through a regulated operator which offers guarantees such as eToro and never through unknown pages.
Next, we will explain the reasons why Amazon is one of the most attractive stocks for investing.
20 years making investors rich
If you had invested $ 500 in Amazon when it went public, your investment would currently be valued at $ 750,000. Yes, your money would have multiplied by 1,500.
And best of all, the stock is not showing signs of exhaustion yet: the company's growth prospects are so great that experts agree that the stock will continue to appreciate at a breakneck pace for several decades to come.
To give a close example: in March 2020 there was a stock market crash and in the following six months, while the world was practically paralyzed, Amazon appreciated no less than 85%.
We are talking about a gigantic company with all the advantages of large companies (its price never drops sharply, since there are always people interested in buying Amazon shares) and at the same time, it has the ability to revalue at very high rates.
Is investing in Amazon today a good idea?
In our opinion, the current moment is ideal to invest in Amazon, since the company is working on several projects that, as soon as they see the light, will make the price of the share skyrocket: robots and delivery drones, autonomous driving, systems of home security, satellite internet, biometric payments (paying with the palm of your hand), telemedicine, pharmacy, streaming, gaming…
However, we must insist that you choose the broker from which you are going to make your investment very well since several users have told us that they have been deceived by an advertisement that is circulating lately on USA.
You may have seen these banners yourself in the newspaper or on a blog. If you have clicked on them, you will have seen how on this page you are asked “how much do you want to invest in Amazon?”, And when you enter an amount, they simply multiply it by three and say “these would be your profits”.
It is a scam.
It is an advertising campaign created by someone unrelated to Amazon and whose objective is to convince you to deposit your money with brokers that are not reliable and that will liquidate your initial investment by charging very high commissions.
Investing in Amazon is a very good idea, but always choose a trusted and regulated broker like eToro.
How much can I earn?
Unlike misleading ads, no one can actually tell you how much you will earn if you invest in Amazon.
It is certainly not a miracle system in which you deposit $ 200 once and each month you receive $ 50 in your bank account. It doesn't work that way.
Many times, throughout my life, several friends have asked me “how much can I earn by investing in Amazon?”, and as I refused to give an exact answer they have been disappointed and have lost interest.
Now, after the huge rise in Amazon shares in recent years, several of these same friends have contacted me to acknowledge that they made a big mistake by missing the opportunity to invest.
I answer them that Amazon still has a long way to go and that the only serious mistake they can make is to continue without investing.
Our enthusiasm for Amazon is not just about what it has achieved so far, but especially about what it will achieve in the future.
Next, we will review Amazon's ongoing projects.
The Amazon Prime Air project has been developing since 2013, and it has been fully functional for several years.
As soon as they get all the necessary licenses to operate, we will no longer have to wait for days to receive our order: in just 30 minutes a drone will leave it at our door.
Stores without cashiers
Amazon Go is already a reality. In these physical Amazon stores, users do not have to queue to pay, as invisible sensors automatically detect which products they have put in the cart and charge them through their Amazon account.
These stores have only just begun to establish themselves, but there is no doubt that they will soon be normal in the field of face-to-face sales.
Bloomberg reported that Amazon Robotics has been working since 2018 on the design of a robot with artificial intelligence that will take care of all our household chores.
Amazon bought the autonomous car company Zoox a few years ago, so it is expected to soon enter the market that Tesla now stars.
To complement drones, Amazon has developed a small autonomous robot called Amazon Scout whose mission will be to deliver packages over short distances and further reduce waiting times.
Amazon is not only installing gigantic warehouses in more and more places on the planet, it has also developed its own fleet of planes and vans to transport merchandise more efficiently.
Health and pharmacy
The very expensive American healthcare has pushed Amazon to innovate in this complicated sector, and its Amazon Care project aims to offer health care services by video call.
It is also finishing gathering the necessary licenses to enter the juicy sector of pharmaceutical distribution, merchandise that resists digitization.
Expansion to new countries
Despite what it may seem, there are many countries in which Amazon does not yet have a dominant position or in which it is not even present.
Jeff Bezos himself has highlighted the importance that countries like India have for Amazon, with a large population and still little penetration of online stores.
Gaming and streaming
Twitch, the trendy streaming platform that is shaking YouTube, is owned by Amazon.
Not only is it taking the audience from the Google platform, but it is also making it more profitable.
Besides, Amazon also owns the Luna project, with which it will offer video games from the cloud.
Kuiper is a subsidiary of Amazon that aspires to provide internet anywhere in the world, with very high speed, and at a very low cost. How? By filling the sky with microsatellites.
As soon as it launches this service, Amazon will take over the gigantic business of telephony providers.
What should my investment strategy be?
Amazon is a company of almost two trillion dollars (that is, millions of millions of dollars), and therefore the daily volatility of its price is low, so I do not recommend that you try day-trading or follow other short-term investment styles.
The most common strategy is to buy the shares and hold them for the long term. Not surprisingly, the long term has enriched the best investors of all time, such as Warren Buffett or Peter Lynch.
However, we do recommend using a “stop-loss” to protect your capital in the event that the market falls sharply.
Here we explain what it is.
What is stop-loss?
When making your investment in Amazon through eToro or any other broker, you will see how you are offered the possibility to put a “stop-loss” or cut losses.
Let's look at an example where the stop loss could have served to preserve your capital.
In this graph, you can see the great fall that Amazon suffered in its origins, when the bursting of the “dot com” bubble reduced its price by 90%.
If you had placed a stop loss, you would have managed to get your money out before a large part of the price drop occurred.
It is true that over time Amazon recovered more and more and made rich those who simply held out, but those who got out on time and then bought back at a lower price became much richer.
Let's look at a hypothetical example:
If someone bought when the uptrend started (at about $ 20).
If you simply kept the investment until today, your investment would have appreciated 15,000%.
Let's think instead of someone who bought at that price, but exited the trade at $ 50 because was using a stop loss. Later, when the price had bottomed out, they bought back at $ 20:
This person would have gotten rid of a good part of the fall, and thanks to this, they would later have been able to buy more shares with the same money, so their investment would have appreciated by 39,500% (more than double that if they had simply maintained the position).
We never know how the market is going to behave, so it is essential to always have our portfolio protected with a stop-loss.
What is leverage?
Unless you are an experienced investor and you are convinced that Amazon is on the rise, we do not recommend using leverage. However, we will explain what leverage is all about.
Leverage is nothing more than borrowing money from the broker to buy more shares so that if our operation goes well we can earn much more money.
An example: Amazon is going to give an event in which it will present its innovations, and you have heard rumors that among them will be a revolutionary autonomous delivery robot that will delight investors, and this is going to shoot up the price of the stocks.
If at that time you only have $ 200 to invest, you can leverage x5 and eToro will loan you another $ 800 to make your position $ 1000.
Suppose that Amazon introduces the autonomous robot, it excites investors and the share price rises 20%: your investment of $ 1000 has generated a return of $ 200, you can now close the position and return the $ 800 that eToro loaned to you.
By putting in just $ 200 out of pocket, you have made another $ 200 profit.
Then, why don't we recommend it?
Leverage is a great tool when the price goes in the direction we want, but it can also liquidate our portfolio if the price goes in the opposite direction.
Imagine that, by surprise, Amazon announces at the conference that it has lost a major lawsuit, that it will have to pay a large award of billions to a competitor, and this brings the price down 10%.
If you were leveraged, your $ 1,000 investment would drop to $ 900, and when you return the $ 800 to eToro, your original balance would be at $ 100.
The 10% drop would have multiplied by five (your leverage) and overnight you would have lost 50% of your capital.
For this reason, we do not recommend using leverage for inexperienced traders.
In the event that you decide to trade with leverage, the stop loss is much more important.
What is the minimum amount to invest in Amazon?
On eToro USA you can invest in Amazon from just $ 200 on.
Even if Amazon's stock is above $ 3,000, that's okay because on eToro you are allowed to buy fractions of shares.
However, we recommend that you do not limit yourself to making an initial investment, but that each time you have liquidity, make regular contributions to make your participation larger and larger.
What are Social Trading and CopyTrading?
eToro not only allows you to invest in Amazon like any other broker, but it also has a social dimension that deserves to be mentioned.
When you register on eToro, you will see that it is quite similar to any social network we are used to. In the timeline, you will see how users of this platform comment on the behavior of stocks and discuss the best investment strategies.
But it doesn't end here.
At eToro there is also the option of CopyTrading, an innovative investment system: with just one click, you can copy investors who are succeeding with their operations and forget about managing your portfolio yourself.
If you use $ 200 to replicate a successful investor, and he or she invests half of their capital in Amazon and the other half in Google, eToro will automatically take your $ 200 and place $ 100 to Amazon and $ 100 to Google.
When the investor closes his or her position, eToro will do the same with yours.
It is a good system for those who do not want or cannot dedicate time to invest.
How to invest with a practice account?
If you still don't feel confident about trading real money, at eToro you can simply activate the “demo” mode and you can start by trading virtual money.
In our opinion, it is a good option for those who want to familiarize themselves with the platform before investing with real funds.
However, professional investors do not usually recommend demo trading because, since there is no real risk of losing money, users learn to trade more slowly.
Another point against simulation is that it is very frustrating to do a demo trade and after a few years see how much you would have earned if it had been done with real money.
* Please note that CFDs are complex instruments and imply a high risk of losing money quickly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You need to consider whether you understand how CFDs work and whether you can afford the risk of losing your money. Crypto assets can fluctuate widely in price and are therefore not appropriate for all investors. Crypto-asset trading is not overseen by any EU regulatory framework. Past performance is not an indication of future results. This is not investment advice.