|Recommended Broker 🇺🇸||
|🌐 Official website:||www.etoro.com *|
How to buy
For those who live in the United States, 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 Australian Securities and Investments Commission (ASIC).
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 our 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: you 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.
How to make your first purchase
As soon as 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.
What does Xiaomi do?
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 we advise to use eToro for investing in Xiaomi in the United States?
- There are lots of products you can invest in
- You can leverage
- User-friendly and simple
- It offers other people successful investment strategies so you can replicate them
- You can short sell
Official homepage: www.etoro.com *
You should certainly consider eToro if you are thinking about trading Xiaomi shares from the United States.
eToro is famous for making “social trading” a trend, an ingenious form of investing in which investors can replicate the techniques of other traders who have been making profits for years.
eToro is very helpful if you don't have much experience in trading, because it automatizes your investment by repeating strategies from traders with a very long profit history. On the other hand, if you are an expert in the subject and decide to share your techniques with the community, eToro rewards you with money.
Besides, the interface of the site is so uncomplicated, great for those who want to start learning about stocks and trading, without ending up overwhelmed with tons of diagrams and numbers.
How to deposit funds on eToro
When it comes to depositing money on eToro, there is not much to say, since it is really straightforward. You only need to select “Deposit funds”, type an amount, and choose your payment method. You can pay with PayPal, bank transfer, credit card, Skrill, or Neteller.
Consider that for security reasons, you must be the holder of the account or the credit card.
The minimum you can deposit is $ 200 and there is a limited amount if you are not verified, so if you plan to operate with larger sums, contact Support previously to verify your account.
You can make the payment in any currency you want and eToro will automatically convert it to USD. But it is better to use USD anyway since the platform charges a fee.
Trading with leverage
If you are not familiar with the term “leverage”, we'll put it short. When trading, it's the capacity of increasing your investment by borrowing money from the broker. For example, you can enter with $ 100, but if you use x2 leverage, you will be investing $ 200.
Leverage, Take Profit and Stop Loss
Assuming that, for instance, you are positive that Xiaomi price is going up, and that you have $ 1,000 for “going long”, you should know that you can increase your investment and earn higher profits.
You could go to your bank, ask for a loan, put something as a guarantee, wait for it to be accepted and receiving the money, and then acquire Xiaomi… Nevertheless, once you've managed doing all that, probably Xiaomi would be already at a much higher price, and investing wouldn't be a good idea anymore.
Leverage is exactly like a credit, and you will only have to click a few times! eToro allows you to invest (and earn) much higher amounts than what you actually have on the platform's wallet. Before trading, you will how much leverage to use as in the image:
When trading with other assets you can use higher leverage. Why? Because cryptocurrencies are usually medium-long term investments, and leverage is used primarily for day trading or short-term trading. Let's talk a bit more about how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 are a “loan” from eToro).
- Then, turns out that Xiaomi price does increases, as you thought, and now the price of your investment is $ 2,400 (20% more), 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 you've earned $ 400, since the other $1,000 was yours initially.
With $ 1000 you get a profit of $ 400, no less than a profit of 40%. That's not bad at all.
Does it sound too good? The trick is that the risk of losing out also increases. If everything goes as you planned, you will earn more money in less time; but if the value of the asset goes in the opposite direction, you will also lose more in less time.
For instance: if the price falls by 10%, you do not lose $ 10, but $ 20, because of the leverage. That is why to operate with leverage it is very important to know other two terms: Take Profit and Stop Loss.
Take Profit is the automatic order to sell once the asset is above the entry price: you purchase Xiaomi shares at $ 100 and you ask eToro to close your operation as soon as the price goes up to $ 120. It is very useful to avoid being blinded by enthusiasm: a 20% profit is usually pretty good, but once you see the price has risen, you might want to gain a bit more and decide to wait, but this could be a mistake. So, Take Profit helps you reduce risks when trading.
Also, if you use leverage you absolutely need to place a Stop Loss order (take into account that any small loss is greater with leverage). Always remember to set a Stop Loss more tight than that suggested by the broker.
Instruments you can operate with in eToro
Besides stocks, there are other financial assets you can trade in this broker.
Commodities or raw materials
Most people invest in raw materials due to their stability. While other assets tend to fluctuate more, raw materials prices vary less and offer security against inflation or market volatility. Nevertheless, prices do depend on supply and demand in the market, so if an economic situation produces greater demand for a certain good, its cost will also rise.
Consider 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, and oil; and the latter are agricultural resources as wheat, soybeans, vegetables, or even dairy.
Index funds are the best alternative for those planning to invest for the long term, mostly for beginners. If you don't need to take back your money in less than five or ten years, index funds offer you security and diversity.
Perhaps you have a different idea, but very few investors can beat the benchmark (although you have probably heard of managers who obtain huge profits).
But except for Warren Buffett and a couple more, all that glitters is not gold: when someone brags about having beaten the index, it was probably for a limited time, or their fees are really high. In the end, indexing is better because commissions are minimal. Besides, take into account that past performances do not ensure a future one.
With index funds, you won't be concerned about that: most of the time, they beat active managers in the long term, and the commissions are so much lower.
Foreign exchange trading or Forex consists, as the name says, in the trading of currencies. In other words, is the conversion of one currency to another to make a profit through the operation.
For example, if you decide to exchange euros and dollars, you speculate how many dollars it will take to buy a euro, expecting that the euro will raise its price compared to the dollar. Therefore, if you purchased each euro at 1.15 USD and you sell them back when their price is 1.20 USD, you'll be earning that difference.
You may be thinking that trading with currencies requires high investments, and that is correct, because fluctuation in prices is never that dramatic, and often you will need to use a lot of leverage (which is an important 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. Still, remember that Forex trading functions with contract for differences, thus you will not own the underlying asset.
“Social trading”, an innovative concept
eToro is a pioneer in social trading, it was the first broker to propose it. Since then, a multitude of copycats have appeared, but we have tried them all and eToro is still the best.
But it wasn't just about creating yet another social network to talk about investment. The main achievement was in allowing users to copy the strategies of experienced traders, and to reward the latter for their ideas and knowledge.
It sounds complicated but it isn't: when you enter eToro you will find in the left menu the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” are kinds of exchange-traded funds or thematic index funds, a portfolio that includes a series of goods of the same market. Let's say that you consider that the gaming industry is going to succeed shortly but you don't have enough information (or time) to choose stocks, you just have to pick the CopyPortfolio “InTheGame”, which includes Google, Microsoft, NVIDIA, Nintendo, Logitech…
You should know that in the last twelve months, CopyPortfolio has generated returns of 100%. And you can benefit from it just by choosing a portfolio, enter your chosen amount, place the stop-loss order and click on the “Invest” button.
A second alternative is to directly copy traders of the platform: in “Copy People” you can find eToro users who are very successful and whose moves you can duplicate.
In the profile of each user, you will be able to see their risk profile (the higher the risk, the more possibilities of earning more and losing more money), their performance, and what type of instruments they operate..
Besides duplicating other investor's strategies, which is really interesting and helpful, we also suggest that you benefit from the community by reading other users. You can learn a lot from their experiences and knowledge, mainly if you aim to make a living from investments.
Virtual portfolio: How does it work?
If you are beginning as an investor, the possibility to operate in “demo” mode may be helpful. Setting a virtual account and trading with fictional funds is very simple.
This is a great tool for those who want to put their talents to the test before playing for real money. When you create your account, you will start with $ 100,000 of virtual balance to do all the trades that you can think of: not just with Xiaomi, you can also work with a diverse portfolio.
If your first attempts don't go well and your balance ends at zero, there is always a possibility to replenish your virtual funds. You'll probably do better on the second try.
Take into account that you should always be prudent when trading, and perhaps a practice account can make you a bit impulsive. It will never be the same as risking your own money.
And of course, if you are going to invest in the medium or long-term, with profits almost guaranteed just by duplicating a strategy, it doesn't make sense that you waste years investing with a virtual account. On the other hand, the virtual mode can be helpful to practice with short and 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.