Global Stock Market Insights for week ending 14th of October from Simplywall.St
Market volatility picked up again last week after the Bank of England said it will end its bond buying on Friday as planned, the IMF cut global growth forecasts, and inflation data suggested rate hikes are set to continue.
You may have heard a lot of people saying that you should invest when the market is down, and sell when the market is up. Or you may have heard the saying “be greedy when others are fearful, be fearful when others are greedy.”
Even when copying people in eToro (where you just essentially automatically copy what stocks the person is buying or selling), the same principle applies. You just need to copy when the person you are copying has a negative performance for the month. However not all people have the courage to actually copy more when the stock market is down. Here are some of the reasons we found out from copy traders:
Recently, several individuals are asking if eToro is legit or if it is already losing money. Aside from the fact that eToro has a one million bankruptcy insurance from Lloyds of London, we need to be sure that they will not be bankrupt. We can do this by checking the company’s revenue, net income, assets and liabilities.
I was able to grab hold of the latest financial report of eToro as follows:
Let us say you are looking at the person you are copying in eToro. You noticed that he is invested 95% in stocks and has a 5% available cash. You compared it to your current copy situation and you see that you only copied 85% in stocks and you have 15% in cash. You realize that you suddenly have a lot of cash compared to the person you are copying.
Some of you may have been asking, why is it that your return is not the same as the person you are copying. In an ideal world whatever returns the person you are copying should be exactly the same as yours. This is because eToro copy trading does not charge any fund management fee to the person who is copying. Whatever charges apply to the person you are copying is the same even for the person who is copying. However, we live in an imperfect world and this is not always usually the case.
Generally there are three major reasons why you do not have the same return as the person you are copying: