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How to buy
For those who live in the United States, the best 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 the United States, 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 should have received an email from eToro, click on the link 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 JP Morgan rising while you wait for your transfer to be done.
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.
About the company
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.
Payment methods on eToro
Within the payment options that eToro accepts you will find: bank transfer, PayPal, credit card, Neteller, and Skrill. Making a deposit on eToro is so simple: click “Deposit funds”, choose an amount and the payment method you prefer.
Consider that for security reasons, you must be the owner of the credit card or the account.
The minimum amount allowed is $ 200, and there is a maximum limit for unverified accounts. Thus, if your intention is to deposit higher amounts, you should contact Support to verify your account.
You can pay in any currency you want and eToro will do the conversion to USD. But we suggest depositing directly in USD since the platform charges a commission.
How to use leverage in trading
In case you still don't know what “leverage” is, we'll describe it briefly: it is the possibility to use a higher amount than you actually have. For example, you can enter with $ 100, but if you use x2 leverage, you will be investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's say that you have complete certainty that JP Morgan will rise, and you want to “go long”, but you only have $ 1,000 available. However, you have the option of investing more money and earn higher profits.
You could consider requesting a credit at your bank or other financial company, but you must know that all the process takes time, and when you receive the money, JP Morgan might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Thanks to leverage, you can get that amount with two clicks. It's like a loan, but much easier and quicker, and with the advantage that you will be getting it directly from eToro. Before trading, you will find the leverage options as in the image:
When trading with other kinds of assets you can use higher leverage. Why? Because leverage is most used for short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. But let's deepen a bit more on how all this works.
If you have the $ 1,000 and use leverage x2, you will be investing $ 2,000. eToro gives you the remaining amount to reach that figure.
A week later turns out that JP Morgan valuation goes up and now the value of your investment is 20% higher, which means, you have $ 2,400 in JP Morgan shares. So, a wise decision is to sell them back now.
You will have to give back the $ 1,000 of leverage and the net profit would be $ 400 (since the other $ 1,000 was your initial investment).
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
The trick is that the risk of losing out is also there. If everything goes according to plan and the price goes up, you will earn profits in little time; but in the opposite scenario, you will also lose more really quickly.
For example: if the price falls by 10%, you won't lose $ 10, but $ 20. That is why the terms “Take Profit” and “Stop Loss” are so important when operating with 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 purchased JP Morgan shares at $ 100, you can ask eToro to close once it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps rising, which could make you lose it all.
Stop Loss is even more important, mostly when trading with leverage, since a small loss could be tragic for your wallet. Consider that eToro will recommend a limit for Stop Loss, but it is better to place it lower than the platform suggests.
Financial instruments you can operate with in this broker
We already know about stocks, there are other financial assets you can trade .
About Index Funds
In case you want to invest in the long term, and you won't need to withdraw your money in five or ten years, index funds can be the best alternative. This type of investment is also suitable for beginners since it is more secure. Besides, they offer more variety.
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.
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.
Index funds offer solutions to both concerns: their commissions are minor and in the long term they tend to beat active managers.
Forex or currency trading allows obtaining profits by exchanging one currency for another.
If you decide to exchange euros and dollars, you acquire euros and pay with dollars, with the expectation that after obtaining the first currency (the euro) it will increase compared to the second (the dollar), to make a profit by selling it. Let's say you entered when a euro is worth 1.10 USD and you exit when the price has gone up to 1.15: consequently, you will gain that margin.
Perhaps you already inferred this, but this type of trading requires a large capital, because prices never increase that much, or using much leverage, which you know is a risk. In case you are just starting in trading, we don't recommend beginning with the currency market, because it's not the safest alternative.
You can trade with almost every currency on eToro. Still, keep in mind that Forex trading works through contract for differences, therefore the underlying asset won't be yours.
“Social trading”, an innovative concept
eToro was the first broker to suggest trading as a social activity, and time has demonstrated that it was an excellent idea. A lot of copycats have appeared since then, but eToro is definitely the best.
But it wasn't just about creating yet another social network to talk about investment. The real innovation was in the possibility for users to replicate the moves of experienced traders, and to reward the latter for their ideas and knowledge.
In the left menu of the site, you will see “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” contain a collection of assets of a certain sector. For example, if you heard that the gaming sector is going to prosper shortly but you don't know enough to start choosing stocks (or you don't have time), you just have to pick the CopyPortfolio called “InTheGame”, which includes Microsoft, Google, Tencent, NVIDIA, Logitech, Intel, AMD, Nintendo, Ubisoft, Unity, among others.
At the time of writing this text, this CopyPortfolio has generated a 100% return in the last twelve months, and it is as simple as clicking on “Invest”, choose the amount, place the stop-loss and wait.
But it is also possible to copy other users of the platform who are successful investors. With “Copy People” you can locate them and imitate their moves easily.
You will see in the profile of each user: the kind of assets they operate with, their risk profile (a higher risk implies higher possibilities of earning more or losing more), and their performance history.
Replicating strategies from others can be very interesting and helpful, but you should also make the most out of the platform's community, read what other users think, and learn from them. It is a great source of information and knowledge, especially if you want to turn investing into a lifestyle.
There are many ways to operate cryptocurrencies: from purchasing and waiting to day trading (and benefit from price volatility).
My suggestion for those who are beginning to trade is going halfway between the two options: when you open your JP Morgan position, place a stop-loss order 15-20% below the highest price, and forget about the operation.
Therefore, if for example you acquire a cryptocurrency at $ 10, it reaches $ 20 and then decreases to $ 12, your position will be closed at $ 16-17 and you will make a pretty good profit.
You may be wondering: why not selling back when the cost is at its peak? But that would only work for a psychic or a fortune-teller. The mentioned method is completely realistic and can work out perfectly if it is well applied.
Later on, you will be able to apply more sophisticated techniques, such as going short to profit from bear markets or using leverage.
We mentioned before that eToro is very easy to manage. Anyone can start using it without having to read endless explanations.
You won't have any problems with the interface if you are familiar with any other social network, like Facebook or Whatsapp.
Now we will walk you through the sign-up process and the different sections of the page that you should familiarize yourself with.
First of all, you will have to enter your personal data.
During the sign-up process, you will also find some questions about your previous experience as an investor.
However, it's not like they're testing you or anything. They only intend to know how much knowledge you have and what type of financial instruments they can recommend. For instance, if it is your first experience in the investment world, they will not recommend that you invest in futures.
Let's see what the different sections of the platform are.
In the “Set Price Alerts” tab, you have, as its name indicates, the possibility to put alarms on the price of certain securities. This is very helpful when you want to purchase an asset that is falling, but perhaps you think that it has not finished falling yet.
“News Feed” is the more “social” section. There, traders can interact and share experiences.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. As we mentioned in this guide, the six types of instruments on eToro are:
- Exchange-Traded Funds
- Forex trading
- Index funds
In “People” are all the profiles and historical performances of other users, and you can replicate their movements with just one click. This is where the “social trading” term is best applied.
You will be able to search and find users according to your interests. When you select an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, in proportion. If you invest $ 1000 and the user puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same company or instrument, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are classified into “Top Trader”, “Market” and “Partner”.
In some cases, you might prefer copying to CopyPortfolios than to individuals, because the former offer more diversity. The different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector will prosper in the future? Then look, because surely there is a CopyPortfolio about it.
* 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.