If you live in the U.K then the good news is that you can now invest in U.S shares like Apple, Netflix, Amazon etc with zero commissions using the popular trading platform eToro.
Here is my guide for U.K investors on how to buy U.S shares using the trading platform, eToro.
Why Invest in U.S Shares?
Many of the products that you use every day are based out of the U.S. Companies like Apple, Amazon, Tesla, Netflix are all listed on U.S stock exchanges. I like to invest in products that I use and love. It's part of my fundamental strategy. So being able to invest in these U.S listed companies is an essential part of my portfolio.
Advantages of Using eToro to invest in U.S Shares
- Commission Free – Stop paying huge brokerage fees to trade overseas shares! eToro doesn't charge any commissions on real stock trades. This is similar to how U.S trading platforms like Robinhood operate.
- Real Stocks – On eToro (for U.K customers) you are trading real stocks. This means you own and are trading the underlying asset not just a CFD.
- Fractional Investing – You can invest in a fraction of a share. This is great for companies like Alphabet where one stock is worth over $1000+. You can start investing with just $50 at a time.
- Invest in other Assets – eToro doesn't just offer stock trading. You can also trade a range of other financial products.
- Copy Trading – eToro is a social trading network. This means you can follow and copy other traders. You can even copy every trade they make. You can browse through the profiles of thousands of experienced traders, see how profitable they have been in the past and what trades they have made.
Risks of investing in Foreign Shares
Trading U.S shares in the U.K does have some risks. The biggest risk is related to currency. The value of the U.S dollar compared to the pound could move up and down. This will have an impact on your profits. So even if the value of the stock goes up, you might not make a profit. On the other hand the price of the U.S dollar could fall in value and this would increase the profit you make.
My Top Tips for Investing using eToro
- Follow Other Traders – eToro is a social trading network. So make use of the social features by following other traders. It's a great way to learn more about investing. You don't need to deposit any money to make use of eToro's social trading features either. Signing up to eToro is free.
- Make Use of ETFs – eToro lists a great range of ETFs. ETFs are one of my favourite ways to invest because I can create a diversified portfolio with just one or two investments.
- Diversify – Thanks to fractional investing you can invest small amounts across a number of different stocks or ETFs. This makes it easy to build up a diversified portfolio even if you only have a few hundred dollars to start investing.