eToro Update Post

Like many of you, I also started my investing journey with the idea that I could invest a small amount and in a matter of days or weeks double or triple my money. Since 2016, I have been saving a portion of my income for the rainy days or if something bad happens. At the start of 2018, I made a new year’s resolution to find a way to earn money while I sleep. This is when I discovered that investing in stock can earn me more money over the year than my savings account if the stock is right. My first project was paper trading with companies like Microsoft, Apple, IBM, and other tech giants, since my profession is closely related to these companies. Paper trading is a way to learn how to trade stocks or any other asset. You do not invest real money, but you invest fictive money or points or you just simply write down on a piece of paper when would you buy something and then write down when you would sell it. In the first couple of months, my paper trading was going good, but I was investing a lot of time in research, opening the trading app and just looking at the price and stressing about fictive money. his led me to read “How To Books” on investing and to try out different methods. At the end of my 7-8 month journey with paper trading, technical analysis, and other time-consuming methods I stumbled upon eToro and their social trading platform. For me, this sounded perfect, you invest money in a person who does all the things that you were doing and you can watch your money grow. I created an account and invested my first $200, then I found someone who had a good track record and started to copy him. In the first 3 months, he was doing great and I decided to invest more money, not even thinking about it I spat out $1000 and put it all on him, even though I knew that I should reduce my risk by investing in multiple investors. Suddenly, January comes and my investor is -5%, I was looking into his history and in the past 3-4 years, he never had a month with a loss higher than 2%. Every day I was telling my self this was his strategy, he will recover his 5% by the end of the month and he will go in the positive spectrum. Then the 1st of February came and I was -3.62% down on my investments.

I was furious, stopped copying him and thought to myself “Trading isn’t difficult, I can do it myself”, but after some time I remembered how I was losing time on research and found some other trades. This time I split my money among 3 traders. February and March were good months, I was up 2.5%. In March, April, and May I had some career changes so I was only working 16h per week, so I decided to start trading. Armed with knowledge from Youtube, Podcasts and Books I thought I can do this. With a positive attitude and huge motivation, I started doing technical analysis and trading stocks. I was nervously waiting for the market to open at 15:30 my time and trading for 2-3 hours, then doing some reading and then trading for 1-2 hours more. In short March and April were the worst months that I had. I spent a huge amount of my time on stock analysis and was down 4% in those two months. if only I had something where I could invest in a group of stocks and if the market went up it went up a bit and if the market went down then it would only go down a bit. This was the moment when I learned about Funds and I started researching where to invest my hard-earned money. If you are an eToro user like me you know that eToro charges you if you buy S&P500, DJ30, and others. For example, if you invest 10k in the S&P500, eToro takes a daily fee of $1.28 and a weekend fee of $3.84. This means if you bought 10k in S&P500 on the 1st of January, until the 1st of January 2019, you would have paid $399.36 fees for the weekends and $323.84 on workdays fees, so in total $723.2. Besides, in 2018 the S&P500 had a “profit” of -4.75%. That is a loss of $475 in a year, besides the fees.

In may I decided to try out a new methodology, I wanted to be a value investor. The tasks that I needed to do were find a good company with good numbers, read a bit into it, and subscribe to it on all of my news platforms. Then I would monitor it for a month and if I had good feelings about it, I would invest. I had a couple of main criteria, the dividend had to be more than 2.5% and the company should have positive sentiment surrounding it, I mean without a good track record over the years.

This marked the birth of the “IJ-Index”, I experimented with a lot of different combinations of stocks, buying IPO-s, buying big companies (e.g. Microsoft), buying stocks that had a scandal with the hope that they are going to normalize, buying cryptos, and more. In the end, it comes down to patience and restricting your time to work on the analysis.

Mid-August was the moment when I finalized my stock pick technique and buy-sell strategy. I sold all of my cryptos and started focusing on Financial, Consumer stocks, but I also wanted to include IPO-s and emerging markets like cannabis, also I bought some nonvolatile stocks to give my portfolio some stability. This resulted in an amazing 3 months, where I recovered most of my loss.

The goal for my “IJ-Index” is to contain a lot of dividend paying stocks and to be at least as good as the S&P500. For my fellow eToro users I want to provide a way to invest into a hobby index fund without the fees that they usually pay for index funds. As mentioned before I will not track my stocks on a daily basis, but I will combine the methods used in Swing Trading together with Value management. The next step that I will try to do in my blog is to track the progress of the “IJ-Index”, some kind of a stas page with the allocation and stock list. This will be a monthly blog post, describing what happened with all of my stocks and how did the index perform.

For now my “IJ-Index” is a combination of US and EU stocks, I focused on the financial stocks in the UK in order to buy dividend paying stocks that have been around for a long time and to diversify my stocks into two geographical areas. The next markets that I want to target is the asian tech market and the canadian pharma market.

This was my “quick” eToro story update blog post. I hope you liked it.

This is not financial advice.
I am not a financial advisor.
The intention of the post is just to share my experiences.
eToro Disclaimer : "66% of Retail CFD Accounts Lose Money
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