Ash The Great | Oct 31, 2017 | 0
eToro Review – An Investment Platform For Regular People
This eToro review was difficult to write because I like the investment platform they have created, I like the fact that people can earn passive income in some cases, and I like the fact that trading is simplified in a way that makes it more accessible to the general public rather than just trading experts. However, I do not like their customer service department, or their verification process, or their higher-than-average fees. I am in two minds about this company, but I tentatively suggest that people who have novice/intermediate experience at trading should give it a go.
What Does eToro Do?
eToro is an investment and trading platform. It has over five million users and is in use in over 170 countries. They call themselves a social trading network. eToro allows you to trade and invest in stocks, indices, currencies, and in commodities (CFDs).
If you are a little dazzled by the vagaries on the website, then do what I did and scroll to the very bottom where they have a bunch of links that answer simple questions such as how to verify your account, how to withdraw, how to deposit, and so forth. You will also find links to their teaching area where you may learn more about the website and how to trade.
You may invest as you please, or you may follow the pattern of another investor. Or, there is a chance that others will follow your lead and you are paid a small commission for the fact that they are following you.
You may connect with other traders and discus your trading strategies. If you use the CopyTrader tool, then you may select another trader and have your investments copy his or her portfolio. You do this by finding people who are doing very well with their investments, you assign that person as the one you wish to copy, and then the system copies their buys and sells automatically. As you copy another trader, he or she is paid a small commission by you. If people copy you, then you receive a comission.
My Advice About eToro?
There is a lot of Internet chatter about the verification process, and two of our research team said that the verification process took an overly long time and that it was a pain in their arse.
Get verified as soon as possible. Do not start trading until you are fully verified. Make sure you are fully verified and that you do not need to add any extra information before you have a fully verified account. In addition, start with a very small amount when you trade, give it a go for a few weeks, and then try withdrawing.
If you are able to conduct a small trade, and if you are able to withdraw your money after however long is required, then you should start using this website more often and with larger amounts.
Going through the verification process and then testing out the system is going to take a long time. You are looking at about a month from the day you sign up until you can start using eToro with full gusto. I suggest you verify first and test the system with a small amount and a small trade because it will help you avoid pain and suffering at a later date.
Why Should You Verify And Test Before Using eToro Properly?
I have seen too many complaints about eToro for me to ignore them. Most of the complaints revolve around the overly-long verification process, the overly-difficult verification process, and the fact that some people have trouble withdrawing their money from the system. To avoid those problems, you need to do the tricky stuff first. After that, you may start using the website regularly and investing larger amounts.
Verify and test, and you will end up being one of the people online who is promoting eToro rather than one of the people saying it is a scam.
eToro – Pros
- I think that their CopyTrader function is actually a rather good idea. I can see how some people do not like it because it removes their personal control over their investments. I also agree with the argument that investors may end up following an investor who simply got lucky. Nevertheless, I think the CopyTrader function gives people a good way of making a passive income while still maintaining an edge over over traders.
- The eToro website has learning tools that teach you how to use the website and how to invest. It teaches all about the various types of investment that people may make with the eToro website.
- I like the free practice account. I always like it when brokerages give you a free practice account so you may play around for a few weeks before you start investing real money. I especially like it when brokerages such as eToro use real market figures and numbers to show you what you would have made or lost if you had made similar investments.
- eToro is not a bad platform for making short-to-middle term investments. I would always advise that people make long-term investments whenever they invest because patience and good investing go hand in hand. Still, if you want to play around and make a profit a little more quickly by exploiting your luck more fully, then eToro is a good place to start.
eToro – Cons
- The verification process is very long, and that was a note from our research team. Let us not forget that over the years our research team has applied for credit cards around the world, they have applied with the most dubious of bitcoin exchanges, and they have tried every online wallet in existence. When they say that the verification times are overly long, you can believe that they are not exaggerating.
- Quite why the customer service department is so blaze and unfocused is a mystery. Are they sitting around in a TV room and picking their teeth. It is not often that you come across a customer service department where apathy is the theme. More than once they have used the excuse, “We are very busy” for things such as why they have not checked our second round of document submissions, or why they cannot confirm there US-trading policy.
- The system has flaws, which wouldn’t usually be a big problem, but it becomes a big problem when they are dealing with big money. For example, we noticed a lag in one of our investments where the profit percentages where behind the times. If we had sold and the market had changed in the meantime, then we could have lost money through no fault of our own.
- It takes around ten days for the customer service department to look at request tickets that are not considered urgent. They only consider security risks as urgent. It may sound small, but what if you had your account frozen for whatever reason and are looking to make a trade with your funds, you could potentially miss out on big money while they get around they viewing and acting on your customer support ticket.
- eToro fees are a little high. I know that brokerage fees are often rather high, but eToro is a little on the expensive side. If you can make the system work, and if there are elements within the system that you like and prefer, then eToro is the one for you. The fees are high, but I should balance that by saying that it is better to have a platform you are comfortable with that costs more, than use a cheap brokerage where you do not feel in control or comfortable.
- The fees structure is very confusing for novice investors. Plus, the idea of spreads, hidden spreads, and how they reflect the market will also confuse novices. Again, to be fair, I balance this by mentioning that their teaching tools are good and novices are able to learn plenty if they invest the time.
Conclusion – Here Is What You Should Do
If you are looking to invest in order to build wealth, then you should have several arms of investment, such as investing in saving accounts, bonds, bitcoin, storing niche collectibles, renting space in your garage, etc. (whatever you know will make you money). If you were to have 12 investing arms (for example), then I would agree that eToro could be one of them.
I do not think that eToro is the right type of basket where you can put all your eggs. If you were creating a jewelry shop, then that is an investment in which you can put all your eggs. If you were buying government bonds, then that is an investment in which you can put all your eggs. eToro is not such an investment. It has the potential to make you some money, and it has the potential to make you some passive income, but you could start today and trade for 30 years and still come away with less than if you had been investing in bonds for 30 years. The broad feel, the reliance on luck, and that ever-so-subtle removal of control from your hands is too much to say you should put all your eggs in this basket.
Again, I say that eToro is worthy of being one of your investments (where eToro contains your investment portfolio), however, it is not something into which you should pour all your savings and your spare wages. For example, if you had an investment budget that contains money you put aside for investing, then I would put around 8% of that money into your eToro investments. Also, remember my advice about getting verified first and testing the system to see how easy it is to withdraw before you start investing in a big way.