Over the past few years, cryptocurrencies have become the new hot commodity to buy and sell. Everyone likes to talk about what Bitcoin is doing. 

With the increased popularity, investing in crypto has become easy and user-friendly. Platforms like eToro and Coinbase have established themselves as some of the top crypto exchanges, providing access to a large variety of cryptocurrencies.

Below, we will compare eToro and Coinbase to help you decide which is the better platform for you. We will look at the pros and cons of each, what makes them special, and the costs. By the end hopefully one fits your investing strategy. 

What are they? 

eToro is a company based in Tel-Aviv, Israel, and was founded in 2007. Their current CEO is Yoni Assia. 

eToro is a social trading platform that enables you to buy cryptocurrency, stocks, and ETFs. It also allows you to keep up with the investing strategies of other eToro users.

The company started off as a crypto exchange only, however, has evolved into a multi-asset broker. eToro was actually one of the early adopters of cryptocurrency exchange. 

Social investing allows investors to share ideas and on eToro, you can copy other portfolios and strategies. 

eToro is supported in more than 150 countries and 45 states. Investors in Tennessee, Hawaii, Minnesota, Nevada, or New York, unfortunately, do not have access to eToro. It currently has over 25 million registered users. 

eToro offers many features, but it mainly includes trading different equities, following top traders' portfolios, and trading virtual currency for practice. 

Coinbase is a crypto-only exchange based in the United States founded in 2012. It went public on the NASDAQ stock exchange in 2021. 

Coinbase is a very user-friendly platform to buy and sell cryptos. Their focus is to make trading simple. Besides buying and selling crypto, reading-related news, or checking charts there is not that much more offered by Coinbase. 

Coinbase is the largest crypto exchange by trading volume in the United States. It is accessible in over 100 countries and 49 U.S. states – Coinbase is not supported in Hawaii. 

eToro vs Coinbase: Features

One of the prominent differences between eToro and Coinbase is how many cryptos are available to trade. 

Coinbase offers over 120 tradable currencies which includes the majority of the top 30 largest by market cap. 

Unique to Coinbase is the ability to borrow cash using crypto and earn interest by loaning out your cryptos. 

eToro only offers over 60 cryptocurrencies. For international users, stocks, ETFs, and other securities are available to trade as well. 

Both exchanges update their cryptocurrency list with new currencies. 

One feature they both share is they offer a digital wallet. A wallet is so investors have a secure place to store their assets. Both wallets are the same concept but are different in a few ways. 

You do not have to be a Coinbase user to open a Coinbase Wallet. eToro is the opposite, you have to be a user to access the wallet. 

Coinbase allows the transfer of money between the wallet and crypto exchange. On eToro, it is a one-way road, once cryptos are transferred to the wallet, they cannot be moved back.

eToro charges a .5% to transfer to the wallet and Coinbase does not.

Only a handful of currencies are supported on eToro's wallet whereas Coinbase supports more. 

The features that distinguish eToro over Coinbase are their social community, copy trading, and demo accounts. 

There is a forum that allows users to follow each other and start posts. This is a great opportunity to share investment strategies and maybe learn something new. 

eToro also shares what percentage of its users are buying or selling a specific crypto. 

Their CopyTrading encourages users to duplicate what experience and successful traders have done. Real-time trades are made public so others can follow. 

Copying one's entire portfolio is an option also on eToro. 

Demo Accounts are a great way to learn and gain experience trading crypto with zero consequences. eToro starts you with $100,000 to gain practice and have some fund-making trades. Coinbase does not offer any of these features. 

Coinbase's main features are an active watchlist, real-time news of the industry, and the ability to earn crypto by watching videos.

Fees

In this world, to make money, you have to spend money. Fees can easily add up and can be hard to keep track of. Fortunately, eToro is one of the more affordable crypto exchanges in the United States. 

There is no commission fee, investors pay a 1% fee to buy or sell crypto. The 1% is calculated for both the open and close of the position. This fee is calculated at the time you open the position and is added to the market price. 

eToro does not charge based on what payment method is used to fund your account.

eToro has a minimum deposit of $10. For wire transfers, the minimum is $500. 

If you're using the eToro Money Wallet for your crypto, you'll also pay a 0.1% conversion fee to convert one coin to another.

There's also a 0.5% transfer fee (minimum of $1, maximum of $50) when you transfer funds from your eToro brokerage account to the Money wallet.

eToro also charges miscellaneous fees for certain optional services.

You'll also pay different fees for paper services, wire transfers, and other services.

If you are an inactive eToro user for more than 12 months, they will charge you a $10 monthly fee. International users pay $5 to withdraw funds. 

Coinbase fees are more expensive and more complicated. When you make a trade-in 

Coinbase, there are 2 fees. 

The first fee you are charged with depends on the value of the transaction and it ranges from $0.99 to $2.99. 

The next fee is a percentage based that ranges from 1.49% to 3.99% depending on the payment method used. 

On Coinbase, the fees shrink as trade size increases. Coinbase does not charge a withdrawal fee. It also does not cost anything to add funds to the wallet, but most deposits do have fees. 

To buy and sell crypto on Coinbase, all you need is $2 in your account. This makes Coinbase pretty attractive for investors. 

User Experience

The reason both eToro and Coinbase are so popular is how easy it is to operate these platforms. 

Coinbase is known for being a crypto exchange for beginners. It offers educational tools for novice investors and an online support portal. Users can watch short videos to earn a stake in crypto. 

Coinbase's interface makes it straightforward to buy or sell crypto.  The only downside is it offers limited transaction types. 

When opening up Coin base online or with the app, the dashboard will show gainers, losers, and the most volatile crypto that day. There are color-coded charts that show the performance of that crypto in real-time or in the past. 

Any cryptocurrencies added to your watch list will be tracked too. Coinbase also provides news in the crypto world to keep you up to date. 

eToro is more for investors who have some knowledge of trading crypto. They offer more transaction types than Coinbase. 

eToro is limited in terms of educational opportunities offered, but they do have a basic help center. 

One key difference is that eToro has a community chat where questions can be asked, and ideas can be shared. 

On eToro, it has a customized dashboard. It shows the biggest movers of the day and what are the most popular cryptos among other investors. 

It also has a watchlist that shows a color-coded chart to easily keep track of your cryptos. 

For most cryptocurrencies, eToro gives a rating of buy, sell, or hold based on technical indicators. 

Both options make the process of trading crypto very manageable. Just select the crypto you want to trade, enter how much you want to purchase, select the trade type, and submit. 

Both apps are clean and work smoothly. They receive pretty decent reviews from users. 

Security and Reputation

eToro and Coinbase are reputable and secure services. Both have years in the world of investing and have millions of users who trust both platforms with their hard-earned money. But everyone wonders if they are legit, and can be trusted? 

eToro is regulated by the United Kingdom's Financial Conduct Authority (FCA). It is also a member of the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). 

This means that eToro is regulated by the government, like many other trusted financial services. 

All user funds are kept in tier 1 banks and cash deposits are insured by the FDIC for up to $250,000. 

eToro also complies with the Cyprus Securities and Exchange Commission (CySEC) and the 

Australian Securities and Investment Commission (ASIC). 

Coinbase is regulated in the United States as well by the United Kingdom's FCA. All client funds are kept in United States banks and cash deposits are FDIC insured for up to $250,000. 

Cryptocurrencies that are stored online on Coinbase's exchange are insured. Coinbase stores over 98% of deposits offline in cold storage facilities that are monitored 24/7. 

Both eToro and Coinbase have multi-factor authentication to secure your account. They also conduct bug bounty programs so ethical hackers can find any holes in the system.

Millions of people have safely traded trillions of dollars worth of crypto on both of these services. So, the answer to the question is yes! eToro and Coinbase can be trusted with your money. 

Final Verdict 

Coinbase and eToro are both quality options to trade cryptocurrencies. They have their advantages; it just depends on your preference. 

Coinbase

• Straightforward
• Everything you need in one place,
• Offers a wide variety of currencies
• High fees

eToro

• More advanced
• Lower fees, social trading
• Demo accounts
• Limited currencies to trade

Explore both options and do your research. To take a deeper dive into eToro click here.

If you are just getting started with crypto and want to learn more, check out our in-depth article on Cryptocurrency. 

The post eToro vs Coinbase appeared first on Wall Street Survivor.

Seeking Alpha vs Zacks: what do these two titans of stock research and analysis have in common, what makes them different, and most importantly, which one is right for you?

Seeking Alpha and Zacks are research and analysis tools for investors who pick their own stocks.

Both are famous for their stock ratings – millions of people across the world pay to have access to their “strong-buy” stocks and know to avoid their “strong sell” stocks like the plague.

Both use expert analysts' research and analysis to derive information about investments. Their goal is to provide investors with tools to learn and build their own portfolios. 

They are similar in many ways, but the main difference is their approach to researching and presenting stock data. This article should help you decide which service fits your investing style better – Seeking Alpha or Zacks?

Seeking Alpha vs Zacks: How They Started

Zacks

Zacks was started by Len Zacks in 1978, a Ph.D. from MIT. 

Len was obsessed with analyzing Wall Street Analysts and wanted to build his own team of in-house analysts.

His vision was to create a team who could rate stocks, then provide productized ranks and lists for investors to analyze and build their portfolios. 

Zacks believes that earnings estimate revisions are the most powerful factor to drive stock prices.

Basically, when financial analysts change how much a company will earn in a quarter, that can change stock prices more than anything else. 

Seeking Alpha

Seeking Alpha was started in 2004 by financial analyst David Jackson. The original plan was to create a research platform where passionate investors can share their own stock analysis with a community. 

A big component of Seeking Alpha is this unique idea of crowdsourcing investing. Sharing knowledge with a community and all supplying, refining research, insights, and opinions. 

Instead of having its own analysts, Seeking Alpha uses Wall Street analysts, fund managers, and other reputable market watchers. 

They do have in-house editors who cover current market news and review articles submitted to their forum. 

Seeking Alpha vs Zacks: Rating Stocks

Each of these platforms provides a list of stocks that are rated to get an idea of what to research. All these lists and ratings are done by respected analysts.

The main reason to use either of these services is to find stock ideas to research for yourself. 

Zacks has a very straightforward rating system. In the areas of value, growth, and momentum, stocks are given a ranking of A through F. Equities are also given a rank of 1 (strong buy) to 5 (strong sell).

The Zacks #1 list shows you the top 5% of stocks with the most potential. There are stock screens that allow you to pick stocks based on your investing strategy. 

Zacks uses quantitative analysis to rate and rank stocks. This algorithm gives Zacks objective 

information to find the best stocks. 

Zacks' rankings have done very well against the S&P 500. 

Over the past 34 years, stocks that Zacks rank as a “#1 Strong Buy” have outperformed the S&P 500 by an average of 13.9% each year. Zacks has proven that its system works and why so many investors use its analysis. 

Zacks now provides rankings for ETFs, mutual funds, and other equities. 

Seeking Alpha has a top-rated stocks list as well, compiling of 50-75 stocks that earn strong buy scores. Scores are broken up and determined by Seeking Alpha contributors, Wall Street analysts, and Seeking Alpha's quantitative algorithm. Any stock with a rating above a 4.5 is rated a very bullish buy. 

Beside the analyst's score, each stock is also given a letter grade for valuation, growth, profitability, and momentum. These ratings provide investors with a very easy way to get stock ideas. 

Seeking Alpha has also done extremely well compared to the S&P 500 since 2010. Seeking Alpha's “Very Bullish” rated stocks based on Quant Performance, have returned an average of 28% per year.

That's 4x the average return of the S&P 500!!

Their quantitative analysis is slightly more successful compared to the market than Zacks.

In this new world of alternative equities, Seeking Alpha offers analysis and updates on crypto, forex, and commodities.  

Seeking Alpha vs Zacks: Stock Research

Seeking Alpha and Zacks provides stock research that is detailed and reputable. 

Zacks is the better option if you want a traditional stock research report – a single report that's relatively easy to read and presents a professional analyst's view of a company they've been following for many years. 

Each report contains a deep dive into the company and a look at its fundamentals and growth potential. They offer an in-depth report for every stock they cover. 

Another major feature of Zacks is their stock screener. It allows investors to filter and search for companies based on the return of investment, price changes, earnings per share, or your own investment style. 

Zacks also offers interactive charts that show a stock's reaction to earning reports and other fundamental data. 

Seeking Alpha is the better platform if you want a diversity of viewpoints, analysis methods, and opinions. 

Reading through several analysis articles takes more time than reading a single research report, but advanced investors can dive deeper into both the bull and bear cases for a stock. 

This gives investors more tools to decide their strategy and grow their portfolio. 

Seeking Alpha provides a stock screener that enables you to sort and search by financial ratios, analyst ratings, profitability, and many other fundamental and technical configurations. 

Other Features

Both have education centers 

• Zacks offers videos and courses on investment strategies. Zacks also has a complete guide on understanding the power of earnings estimates. 
• Seeking Alpha offers numerous articles about the world of investing, portfolio management, and their quant ratings. If you are not much of a reader, they have investing podcasts and videos as well. 

Seeking Alpha has news, and editors report on live coverage. It is a nice feature to have updated news on the stock market world and research your next stock pick all in one place. 

Zacks provides an earnings calendar. It tells you which companies are releasing their earnings that specific day and what time of day they come out – before the market opens or after it closes. 

Once the earnings report is released, it compares Zacks' estimate to the actual results and the price change. 

Each platform has a portfolio tracker. At Zacks, you will see their rankings of all the equities currently held and receive daily email notifications on the performance of your portfolio. 

Same thing for Seeking Alpha, up-to-date notifications of your portfolio's health. 

Seeking Alpha vs Zacks: How Much do They Cost?

Both have a free version.

But, they each keep their most sought-after features behind the paywall.

You can see Wall Street analyst ratings with Seeking Alpha, but to access their quant ratings and top-rated quant list, you have to have a Seeking Alpha premium account.

Zacks has free ranked lists, for your email address. You can see what Zacks ranks stocks for free, but to get the Zacks #1 Stock List you have to be a premium member.

Zacks Premium $249, $20.75/month, 30-day free trial.

Seeking Alpha Premium, $240, $19.99/month, 14-day free trial. 

Each has subscriptions greater than the premium that comes with more features but costs a significant amount more. 

My Experience with Seeking Alpha vs Zacks

Zacks

I like the lists they send via email, but don't think I would ever browse the site.

The earnings calendar is helpful to keep up to date. 

Seeking Alpha

I like the site and the platform, the customization of how I can look at the analysis. I've also found myself casually logging in to read interesting articles, news stories, and keep tabs in real-time on my portfolio. It really feels like a “one-stop shop” for all my investing analysis needs. 

Seeking Alpha vs Zacks: Bottom Line

Here's the bottom line:

They use different methodologies

Seeking Alpha

• Newer
• More tech, data, and AI-focused
• Crowdsourced analysts' opinions

Zacks

• Older
• Focuses on more curation (ranked lists)
• In house analysts

Seeking Alpha and Zacks offer a service to help investors find successful stocks. Their research and analysis are conducted by professionals. Their selections are proven and have outperformed the market. Both are great platforms, just depends on your preferences. 

So which type of investor are you? How do you prefer to learn about your portfolio and analyze future investments?

It's worth trying one or both, ESPECIALLY since they both have amazing, all-access free trials.

Get Seeking Alpha Premium FREE for 14 Days

Get Zacks Premium FREE for 30 Days

To learn more about each one, click here for our review of Zacks and click here for our review of Seeking Alpha. 

The post Seeking Alpha vs Zacks appeared first on Wall Street Survivor.

If you haven't heard of the Morning Brew by now, where have you been?!

Just kidding; but we do want to fill you in if you aren't already in-the-know.

Today we will be reviewing the Morning Brew, one of the most popular daily email newsletters out there.

What is the Morning Brew?

The Morning Brew is a New York City-based media company that made its name by starting a free, self-named email newsletter that gets delivered to your inbox every morning before work. Since then, the Brew has launched new newsletters as well as podcasts.

The Morning Brew was co founded by Alex Lieberman and Austin Rief in 2015 at the University of Michigan. It now has over 4 million subscribers and about 100 employees. 

What's In the Newsletter?

These are some of the sections you'll see in every Morning Brew email.

Markets

The Markets section appears at the top of every Morning Brew email. This section shows you how the three major stock indices, the 10-year U.S. Treasury yield, and Bitcoin performed for the past day. You’ll also see the performance of a popular company or commodity at the bottom of this section – this one changes every day. 

Under the daily gain and loss report, you’ll see a summary of what happened overall in the market. There will also be a short commentary on why it happened or how it’s affecting other parts of the economy. 

World

The World section includes headlines regarding geopolitical issues or stories from the U.S. with global implications. This section might give an update on a major world conflict, break the news on a move made by a large multinational corporation, or talk about what the world’s political leaders are doing.

Grab Bag (Key Performance Indicators)

The Grab Bag is one of our favorite sections. This section gives you quick links to and short descriptions of three different stories, organized by:

Stat: An interesting statistic like the number of fans at a recent sporting event or an uptick in streaming of a particular song or artist.

Quote: A recent sound byte (usually from someone famous) and why it was said.

Read: A catchy headline with a link to an interesting story.

Brew’s Bets

This section contains an assortment of recommendations from the Morning Brew team. The recommendations might be for a documentary, a comedy special, a new product, or a piece of life advice.

Some of these recommendations are paid advertisements from Morning Brew’s partners, while others are simply products or entertainment that the team finds interesting.

What Else is Brewing

The What Else is Brewing section gives you some other stories to check out if you decide you’re not done reading the news yet. Rather than reserving an entire section for one story, What Else is Brewing just lists a few headlines and gives a brief description of each story. These stories are usually smaller or more random than their counterparts that appear earlier in the email. 

From the Crew

Sometimes you’ll see a section called From the Crew at the bottom of the newsletter. This is the Morning Brew’s place to advertise some of their other products and events. Here you can find links to the Brew’s other newsletters, podcasts, and even special events like the Leadership Accelerator virtual cohort.

Games

At the bottom of every Morning Brew email, you’ll see a game or two that you can play to round out your reading experience. The games range in type and difficulty; there have been crossword puzzles, spelling bees, word games, and more. Our favorite Morning Brew game is one where they list several headlines and ask you to guess which one is fake – we’ve seen some crazy headlines!

Other Sections

The sections listed above are the sections you’ll see in just about every email. But it doesn’t end there! Several sections of every email rotate every day. You’ll see sections like:

Crypto: an update on the world of cryptocurrency, including spikes, drops, and news.

Economy: news on key indicators and predictors as well as the overall state of the economy.

Labor: headlines on joblessness, shortages, or jumps in applications for a particular industry.

Health: what’s going on in the medical field as well as updates on drug and pharmaceutical laws.

Education: Which schools around the world are performing well and what moves they’re making.

Art: Sale prices and important stories in the world of the arts.

Entertainment: What’s going on in the lives of celebrities, plus updates on new movies, TV shows, and the like.

Work: Interesting reports on salaries and what industries are hot.

Calendar: Holidays, traditions, and upcoming events.

You’ll also see ads from some of the Morning Brew’s partners scattered throughout each newsletter. When you click on these links or buy the products, Morning Brew will earn a commission. The company is very good about letting the reader know when a section of the email is an ad; you’ll see a headline such as “Sponsored” or “Together With…”

Other Products

The Morning Brew newsletter isn't the Brew's only product on the market. They also offer a selection of other email newsletters and podcasts.

Newsletters

Money Scoop: Money Scoop comes out three times a week. It contains reports on the economy, investing updates, and tips on things like personal finance and Excel skills.

Sidekick: Side hustle tips, career advice, and updates on what jobs are raking in the cash.

Money with Katie: This weekly email contains personal finance advice, budgeting tips, and tax strategies. 

Podcasts:

Business Casual: Business Casual comes out twice a week. Each episode is a conversation between the hosts (Nora Ali and Scott Rogowski) and an entrepreneur or business expert.

The Money with Katie Show: This podcast, along with Katie’s newsletter, is filled with finance and tax tips.

Founder’s Journal: The Founder’s Journal is Alex Lieberman’s very own “audio diary” where he gives tips for building and maintaining your own business.

Imposters: This is another podcast from Alex Lieberman. Every episode is an interview with Alex and a big name in business, entertainment, or sports.

How Does the Morning Brew Make Money?

The Morning Brew makes most of its money through ads. They also sell merch which you can buy on their website.

Is the Morning Brew Worth It?

Well, the Brew is 100% FREE for subscribers. So yes – the Morning Brew is worth it!

I suppose the better question is: is the Morning Brew worth your time?

And again, our answer is a resounding yes; the Morning Brew is a great use of a couple minutes of your time every morning.

We at Wall Street Survivor have been reading the Brew for years, and we’re much better for it. It keeps us up to date on the going-ons of the world!

Final Thoughts

If you've been wanting to stay up to date on politics, the economy, or random news, there's no better time to start than right now.

The Morning Brew is the best place to get your daily dose of news, and it only takes a few minutes a day!

The post Morning Brew Review appeared first on Wall Street Survivor.

The Motley Fool's Epic Bundle is one of the Motley Fool's newest stock recommendations services.

Actually, it's not really a new service but rather a combination of 3 of their existing services. It includes their 2 most popular services, Stock Advisor and Rule Breakers, and their newest service, Everlasting Stocks.

It currently retails for $499 per year.

Is the Motley Fool Epic Bundle Worth It?

At first I was skeptical, and then the more I researched it, I became a convinced it was a good deal, and I subscribed.  With the Epic Bundle you are getting $797 worth of their newsletters for $499.  That saves you $298 each and every year on the renewal.  Stock Advisor is normally $199/yr, Rule Breakers $299/yr, and Everlasting Stocks is $299/yr.

You might be able to find a promotion link to get Stock Advisor at a discount for the first year for new subscribers, but if you let it renew for the second year, it will be “at the then current rate.”  So the Epic Bundle definitely saves you money because it is much cheaper in year 2 and thereafter.  If you can invest at least $1,000 in the market each month, then the $499 is a small price to pay to get stock picks that historically have outperformed the SP500.  Remember, to be successful investing in the stock market you must be thinking long term (at least 5 years), you should invest monthly so that you are always buying (dollar cost average principle), and your goal is to outperform the SP500.

And when you subscribe to the Epic Bundle, each month you will get 6 new stock picks and 15 timely re-recommendations of previous stock picks.  You also get immediate access to each of the 3 services' historical picks.

What is the Epic Bundle?

Here is a quick review of the 3 services you get immediate access to when you subscribe to the Epic Bundle:

1. Stock Advisor: 

Stock Advisor is the Motley Fool's original newsletter going back to April, 2002.  It is the combined efforts of the Motley Fool founders, brothers Tom and David Gardner.  Every month they each pick one new stock and give a list of their top 5 favorite stocks.  So that is essentially 2 new stock picks a month and re-recommendations of 10 of their current favorite stocks from previous picks.  This is their most popular service as it has over 1,000,000 subscribers. 

Mostly importantly, the average return of all of Stock Adivsor's stock picks from this service is 356% compared to the SP500's 124% (20 years).

2.  Rule Breakers 

Rule Breakers was launched in December, 2004.  This is specifically just David Gardner and his team's picks.  They target high growth companies in high growth industries.  What this means is that it might take a year or so for these stocks to take off.  And when they do take off, they really take off.  But what it also means is they pick a few losers each year.  David Gardner's teams

Mostly importantly, the average return of all of Rule Breakers stock picks from this service is 205% compared to the SP500's 106% (18 years).

3. Everlasting Stocks 

The Motley Fool Everlasting Stocks service was launched in October 2018.  This service is managed by Tom Gardner, one of the 2 brothers that founded the Motley Fool.  Second on the team is the Motley Fool's Chief Investment Officer Andy Cross.

One unique feature of Everlasting stocks is the ranking they provide monthly of their picks.  As they say:

Everlasting Stocks is designed to beat the market over 5 years with companies that represent Tom Gardner's Everlasting principles. Our Top 10 Rankings each month highlight those that we believe are the most timely to beat the market and attractive for new money or additional capital. Just because a company isn't on the list doesn't necessarily mean we've lost confidence in it. We just 
prefer these to consider first.

Here's a little peak of their May 2022 Top 10 Rankings.  I am just showing the top 5 as the I don't want to get in trouble from the Fool!

Is the Motley Fool Epic Bundle Legit?

I get asked this question alot.  The Motley Fool Epic Bundle is absolutely legit.  The Motley Fool is a very reliable company.  I know many of their team members and they are very active presenting at financial education conferences around the country.  Their customer service is also perfect, offering both a phone number and email support during market hours.  Bottom line, if you are looking to make you life a little easier and can invest at least a few hundred dollars in the market each month, and plan on keeping the money invested for at least 5 years, you should try it.

To learn more, or to sign up for the Epic Bundle, use this landing page to get their lowest price.

The post Motley Fool Epic Bundle Review: Is it Worth It? appeared first on Wall Street Survivor.

The Concept

Let's say you bought a birthday cake for 10 people. However, more people showed up than expected, so you have to cut more than 10 slices. It is still the same amount of cake, no matter how many slices you cut it into. 

Same concept for a stock split. The board of directors will issue more shares of stock to shareholders without diluting their investment.  

For example, say you own 1 share worth $100. If the company opts for a 2-1 stock split, you will have 2 shares worth $50 each.

A stock split increases the number of shares outstanding, lowers the share price, and the company's market cap does not change. The most common stock split ratios are 2-1 and 3-1. 

Why do stock splits happen?

Companies decide to split their stock when the share price gets too high. That may seem counterintuitive, but it makes it seem more affordable for investors.

After the split, the price per share will be lower which will entice others to invest. Not everyone can afford a $300 stock, but if the price is $100, that makes it more attainable for more people.

Stock splits also create more trading liquidity for a company which is a good thing.

Another reason for a split is if other stocks in the sector are trading well below your price. The other stocks are not always a better value, but investors do make that assumption. 

Impact

If you are a current shareholder of a company and they decide to split, it does not create an advantage for you.

It does not change your initial stake in the company; it will only increase the number of shares you own. Stock splits just try to reel in more outside investors.

A company will announce a stock split to lower the price per share. The hope is that with a split, it will result in an increase in share price and increase in company value.

More people can buy, you see demand rising, and the price may go up.

When a split is announced, it is good news to hear for an investor. The announcement signals to the market that the company is growing and investors hope it continues to. 

Dividends paid by the company are usually adjusted proportionately to the stock split ratio, so the total amount received does not change. 

Stock Split Studies

The question with stock splits is, are they beneficial to the stock or not? We will take a look at some studies done in the past to answer this question. 

One of the first studies on stock splits was done in the 1960s by economist Eugene Fama – founder of the efficient markets theory. Fama found that in the long run, the performance of a stock is no different after a split. 

David Ikenberry, Chairman of the Finance Department at the University of Illinois, did a study in 2003 examining the price effect of stock splits.

Ikenberry compared companies that split to similar companies that did not split. He chose 1000 companies from 1990 to 1997 and included 2-1, 3-1, and 4-1 splits.

The results showed that the split stocks on average outperformed the market by 8% the following year and 12% over the next three years. 

There have been more studies done in the past, but experts still have different opinions.

In the short term, a stock split might be bullish due to the increase in volatility. Looking down the line, a stock that split should eventually fall back in line with the market. 

Current Stock Splits 

Alphabet (GOOGL), which is the parent company of Google, announced back in February there will be a 20-1 stock split on July 15.

Google shares have returned around 150% over the past 5 years; compared to the S&P 500 return of 80%. Google has the growth momentum to support a stock split.

Google trades around $2,207 (based on the most recent close) a share and with the split, it would trade around $110 a share. This would make Google significantly more affordable for retail investors and ideally create a bullish run.

Amazon (AMZN) also announced they will be doing a 20-1 stock split effective June 3. This would be its first stock split since 1999.

Even though Amazon has had historic growth over the past twenty years, returns have underperformed the S&P 500 over the past three years.

They are hoping this split will bring new volume to the stock. Amazon shares would go from roughly $2,146 (most recent close) to around $107 – again more affordable for investors. 

Back in August of 2020, Apple (AAPL) conducted a 4-1 stock split. Their share price decreased about 75% after the split.

Before the 2020 split, Apple had split four times since going public. Apple has had a history of short-term sell-offs post splits. Apple shares have lost an average of 5.6%, two weeks after a split. 

Source: Kensho

Tesla (TSLA) announced a 5-1 stock split in August of 2020. Their shares rose 80% over three weeks from just the announcement!

The pre-split price was around $2,213 and after the split, it was around $498.

The chart below shows the momentum after the announcement, but there is a drop once the split is effective. 

Source: MarketWatch

Conclusion

Whether Stock Splits are a good thing or not just depends on the company.

A stock split is a sign that a company is excelling in terms of price and earnings growth.

If you are a believer in a company, a stock split is a golden opportunity to buy shares at a lower price. 

The most famous case of a company that will not split is Warren Buffet's company, Berkshire Hathaway.

Their Class A stock currently trades at around $456,000 a share. Buffet says that he would rather focus on long-term gains, rather than temporary success. 

The post What are Stock Splits appeared first on Wall Street Survivor.

A recession has been a very popular word over the past couple years with the coronavirus pandemic going on and with Russia’s invasion of Ukraine.

Last Quarter (Q1), Gross Domestic Product (GDP) declined by 1.4 percent. If the current quarter (Q2) has a negative GDP, we will technically be in a recession. We will not know until Q2 is over and the numbers are announced. 

These current events have led to shaky times in the economy, but we will show you in this article how to still be successful through some recession stocks. 

What is a Recession?

A recession is a decline in economic growth (GDP) for two or more quarters – half a year.

Typically, during a recession, there is a significant drop in the stock market; the housing market is unstable, and there is a rise in unemployment. 

The National Bureau of Economic Research (NBER) is the one who officially declares recessions in the United States. Their definition is a little different than the general public’s opinion.

They say a recession is a strong decline in economic activity that is spread across the economy that lasts a few months. NBER looks at real income, employment, industrial production, and wholesale-retail sales. 

Causes and Effects?

A recession has many causes but let us take a look at three major influencers. 

Economic Shock – An event that occurs spontaneously that creates financial havoc on the economy. In February of 2020, the NBER declared a recession in the US, due to economic shocks in the supply chain caused by the Coronavirus. 

High Inflation – Inflation is what causes prices to rise over time. Too much inflation is a bad thing and the Federal Reserve will raise interest rates to combat it.

Raising interest rates reduces the amount of money people can borrow, which leads to a decline in economic activity. High inflation led to the recession of the early 1980s. 

Large amounts of debt – Taking on too much debt is risky because it can lead to defaults and bankruptcies. The Great Recession of 2008 is an example of excessive debt causing a housing market bubble which crashed the entire economy. 

How does a recession affect me?

Potential Job Loss: As the economy shrinks, companies tighten their budgets and reduce overhead as a reaction to less demand for their products and services.

Job security decreases, so it's important to communicate with your team and managers about your role and its value preceding a recession.

Investments Loss (stocks, real estate, retirement savings): With every recession, your investments tend to get pretty hard. It can be easy to freak out and panic sell. You want to stick to your investing strategy and focus long term. 

Prices rise (food, gas, clothes, etc.): One of the main reasons that we go into a recession is because of high inflation.

Inflation causes prices to rise, so you should budget accordingly. Figure out your day-to-day necessities and cut out luxury items to save money. 

Historical Trends 

What Stock Sectors did well during past Recessions? 

During a recession, the stock market becomes very hectic. The overall stock market tends to get hit, and some stock sectors do worse than others depending on the recession.

However, through all the smoke, there are some stock market sectors that are recession-resistant. The industry calls these “Defensive Sectors”.

Health Care:

Health care tends to be a safe investment during a recession. Within this sector, there are companies in pharmaceutical, health care equipment, biotech, and health care services.

The reason for health care outperforming others is that we buy health care products all the time and purchase them repeatedly. Some of these products include drugs, medical equipment, hospital supplies, and health insurance.

For example, if you are sick, you go to the doctor, and then go to the pharmacy to pick up your medicine.

Health care companies that have high debt and low cash flow tend to get hurt more during a recession. To be safe, look into health care companies with low debt-to-equity ratios and avoid startups. 

Consumer Staples:

Consumer staples is another sector that has outperformed during a recession. These products are always in demand because they are items people use every day. Such as, food, drink, personal products, and household goods.

Companies in this sector are doing business all the time regardless of the state of the economy.

In the chart below, Consumer Staples does its best, when a recession is approaching. 

Utilities: 

The common theme between these three sectors is that consumers always demand these goods and services. Same thing for Utilities – water, electricity, and gas.

Some other companies within this sector are renewable energy and infrastructure (pipelines, cell towers, power lines, etc.) providers. Again, people will always need to pay their bills.  

During a recession inflation rises, which causes prices to rise. People will have to budget properly to save money during tough economic times. They might have to give up luxury items, but they will have to pay utility bills, medical expenses, and will have to eat. 

Investments to avoid during a recession

Avoid companies with a lot of debt on the balance sheet. This means they are more sensitive to high interest rates that come with a recession.

Investors will mark down stock prices to reflect the risk from having so much debt.

Typically during a recession, a business will suffer a decline in sales, and may not be able to pay interest on its debt. This can lead to default or bankruptcy. 

History has shown us that stocks in the financial sector do poorly during recessions. During the great recession of 2008, the financial sector was ravaged by the crash of the housing market.

Two victims of this financial crisis were Lehman Brothers and Bear Sterns – both considered “pillars” of Wall Street. Bear Stearns was bought out by JPMorgan Chase for very cheap, and Lehman Brothers filed for the largest bankruptcy in the United States at the time. 

The recession during the coronavirus pandemic hit some different sectors than previous recessions. The industries heavily impacted were Airlines, Hospitality, and Entertainment.

In April of 2019, more than 2 million travelers passed through United States airports every day. During the 2020 recession, air travel fell by 95% because of the pandemic. Cruise lines, sporting events, and casinos also had a drastic drop in attendance numbers. 

Portfolio Strategy 

There are several factors to consider to prepare your portfolio against a recession.

One of the best ways is to have a diversified portfolio. This means including stocks in the Health Care, Utilities, and Consumer Staples sectors. But also make sure your portfolio is dipping into industries all across the board.

Defensive sector stocks do tend to outperform during recessions; nevertheless they typically have lower growth rates during the recovery phase. That is why also investing in stocks with potentially higher growth rates like tech is a good idea. 

An ideal company during a recession has the following characteristics:

– Low debt

– Profitable

– Strong balance sheet

– Positive cash flow

– Strong demand for their products

Bottom Line is you want to keep a long-term mindset and manage your risk as much as possible. A recession is only for a relatively short period of time, on average 11 months, so you should have an active investing strategy when the positive times return. 

One final way to tackle a recession is to stop spending and build up capital to invest.

The stock market fluctuates all the time; you just have to stay disciplined and know eventually it will recover. If you believe in your investments, one thing you do not want to do is sell when they are at its lowest point.

When you think about it, that company is just “on sale” and a recession is a great time to buy more. That should be the case if the company has strong leadership, solid financials/books, and an optimistic plan for the future. 

Expert Opinions on Recession Stocks:

Let’s take a look at two famous, but different in strategy investors and how they handle a recession. 

Warren Buffett:

Warren Buffett could be considered the poster boy for stock market investing. He is known for his value investing strategy and being the CEO of Berkshire Hathaway, which has the highest-priced stock on the market.

He is a seasoned veteran by surviving market crashes such as Black Monday in 1987, the dot-com bubble in 2000, and the 2008 financial crisis.

During these tough times, Buffet has a very bullish and long-term strategy. He advises investors to be aggressive when others are scared and to capitalize on cheap stock prices.

In a column with the New York Times, Buffett wrote “A simple rule dictates my buying: Be fearful when others are greedy and be greedy when others are fearful”.

Not everyone has Buffett’s patience and confidence, but he does give some solid advice on how to handle a recession.

In this past quarter (Q1), Buffet took advantage of the struggling stock market and purchased $51 billion worth of stock. Buffet is sticking to is investing strategy of buying companies when they have lower value. 

Cathie Wood:

Cathie Wood is the founder of Ark Invest, which is a fund dedicated to investing in high growth companies, with the potential to change the world.

The areas she focuses on are cryptocurrencies, artificial intelligence, renewable energies, robotics, and DNA sequencing.

Wood is not a fan of value stocks like Warren Buffet is; instead she focuses on growth stocks and “disruptive innovation”. Her investment strategy comes with a lot of risk, but the rewards are through the roof.

During the 2020 pandemic year, her fund returned 150% which is unheard of. Since then, her fund has erased most of its pandemic gains.

Wall Street has been very critical of Wood, saying she relies too heavily on her own instincts to build a portfolio. Wood’s response to the criticism is that “innovation gains traction during tumultuous times. 

Final Thoughts

A recession is a scary time because it impacts everything around you. It is important to stay updated with the current state of the economy and how the stock market reacts. With summer right around the corner, check out our summer stock tips.

There is not one stock that is guaranteed to be recession proof, but there are characteristics to look for that will help limit your risk.

Invest in companies that have promising products and leadership with obtainable goals. If you can invest smartly during a recession, times of expansion have the potential to be glorious. 

The post Best Recession Stocks appeared first on Wall Street Survivor.

Interactive Brokers vs TD Ameritrade

Interactive Brokers vs TD Ameritrade: which brokerage is better for you and your money? In this review we will discuss some of the pros and cons of two of the most popular brokerages available to investors.

Both Interactive Brokers and TD Ameritrade hold great renown amongst investors for providing some of the most advanced and cost effective trading platforms on the market.

Seasoned investors often compare Interactive Broker’s (IBKR) Trader Workstation to TD Ameritrade’s thinkorswim platform as both programs offer advanced capabilities for complex, frequent trading.

Additionally, both brokerages and platforms offer a number of free to use services for their clients, including full access to their trading software.

While Interactive Brokers largely focuses on expansion through reputation and word of mouth advertising, both firms have seen immense growth in popularity as the retail investor segment of the market continues to grow and flourish.

Nevertheless, not all investing is the same and prospective investors require different solutions for different goals and strategies.

Follow along with us below for some of the biggest pros and cons of each broker and to discover which platform, if either, is right for you.

Commissions 

Overall, both brokerages take different but similar approaches to their commission structure.

Interactive Brokers offers two different account versions for its users known as IBKR Lite and IBKR Pro, both of which consist of slightly different pricing and pros and cons of their own. 

For a better understanding of these options we recommend you check out our 2022 review of Interactive Brokers. 

In this article we will focus on the best options Interactive Brokers has to offer.

For all intents and purposes, IBKR Lite and TD Ameritrade are largely comparable in their pricing structure. 

Both IBKR Lite and TD users can trade US Stocks, Equities, and Mutual funds commission-free.

However, both options utilize payment for order flow practices that allow the respective brokers to sell client orders to market makers that in return pay to execute the trades themselves, often keeping the bid/ask spread. 

This practice allows both parties to offer commission free trading to their clients in exchange for less favorable price execution.

However, Interactive Brokers clients that opt for the IBKR Pro model are not subject to payment for order flow and their trades are executed efficiently and directly.

This preferred execution model is largely unique to US brokerage accounts, but comes at the cost of either a fixed commission rate per transaction, or a tiered commission structure based on the amount of average monthly volume a trader executes.

For the novice or average investor, IBKR’s Lite option and TD Ameritrade’s platform offer superb software without the worry of any commission or volume-based requirements.

Both firms offer investors options trading with a fee of just $.65 per contract, while Interactive Brokers does offer futures traders a $.85 fee per contract in comparison to TD Ameritrade’s much heavier price point of $2.25 per contract.

Margin

One of the biggest pros of Interactive Brokers for seasoned investors is the firm’s world class margin rates. 

For Lite users, IBKR offers margin for rates as low as 2.58%, falling to under a percent for larger qualifying IBKR Pro users.

Meanwhile, TD Ameritrade also operates on a variable rate system, but its rate starts at 9.5% and bottom out at a much higher rate of 7.5%. 

For many frequent and more advanced traders, low margin rates can make the difference between profitability and losses, and many utilize IBKR’s Pro structure for these volume-based savings.

Fees

Both TD Ameritrade and Interactive Brokers are great options for avoiding the many fees associated with full service brokerages. 

The fees they do have are quite low and are commonplace in the brokerage industry.

Both firms offer free trading on their applications, but offer broker-assisted trading for clients at a price of $25 for TD Ameritrade and $30 per transaction for IBKR.

Although neither firm has a minimum balance requirement for opening an account, TD Ameritrade does charge its clients a $75 fee for fully withdrawing their funds.

Additionally, both firms offer a wide range of free mutual funds for their clients, but for other available funds TD Ameritrade charges a substantial $74.95 fee per transaction, while IBKR charges just $15 per mutual fund trade. 

Product Offerings

Despite both brokerages offering extensive options for investors looking to trade US based equities, TD Ameritrade lacks some of the overall options available to Interactive Brokers clients.

Interactive Brokers prides itself on offering its investors access to 135 markets in 33 countries throughout the world.

These products include stocks, options, futures, forex, bonds, and funds, in addition to IBKR now offering access to Bitcoin, Etherium, Litecoin, and Bitcoin Cash.

TD Ameritrade does offer some qualified investors limited access to cryptocurrencies through Bitcoin Futures, but for the most part is at this point in time nonexistent in the space.

Furthermore, Interactive Brokers offers its clients access to 10,882 no load mutual funds in comparison to TD Ameritrade’s much smaller 4,606 offering.

Although somewhat of a different comparison, TD Ameritrade does offer its investors a significant amount of advisor services that are respectively not available at IBKR.

Research and Education

One of the biggest distinctions between Interactive Brokers and TD Ameritrade is their vastly different approaches to investor education and access to market data and research.

TD Ameritrade is widely known to have some of the best educational resources available to investors and averages over 500 webinars on a monthly basis that are available to its clients (in comparison to IBKR’s 20).

Interactive Brokers offers its clients a large amount of market information and news for free, but does require investors to pay a la carte or in package deals for the vast majority of its partnered research vendors.

Meanwhile TD Ameritrade takes investor education seriously and offers an immense amount of market news and research free of charge for its clients.

These different approaches highlight IBKRs inclination to cater towards more seasoned, volumed traders that already have many sources for market data and research, while TD Ameritrade aims to provide a one size fits all education solution.

Which Brokerage is Right for You?

Overall, Interactive Brokers and TD Ameritrade both provide great pricing structures and investment options to prospective clients, especially with their respective state of the art trading platforms. 

Both firms carry slightly different fees and trading structures, but Interactive Brokers does provide veteran investors options that TD Ameritrade lacks, in terms of both variable pricing and the avoidance of payment for order flow practices.

For more experienced investors, Interactive Brokers offers a more personalized, curtailed investment portfolio that allows access to both cryptocurrency and global markets.

However, for the average investor, IBKR Lite and TD Ameritrade both offer fantastic platforms for growth and commission-free trading of US based stocks and ETFs, while TD Ameritrade does cater more towards beginner investors by offering significantly more tools and educational resources.

The post Interactive Brokers vs TD Ameritrade appeared first on Wall Street Survivor.

Interactive Brokers vs TradeStation

Interactive Brokers vs TradeStation: which is the best brokerage for you and your money? Today we will be reviewing and comparing the ins and outs of Interactive Brokers vs TradeStation (IBKR).

Both brokerages are highly regarded as go-to options for the most active and technical traders around the world.

TradeStation with its flagship program TradeStation 10 and Interactive Brokers Trader Workstation (TWS) provide top of the line charting and analyses for their clients.

For investors that trade consistently with higher volumes, both firms offer immense price and rate benefits, unlike many one size fits all online brokerage accounts.

From the beginning both companies have largely curtailed their features and offerings to savvy, seasoned investors, but both IBKR and TradeStation are racing to streamline their processes for mainstreet investors.

Although many believe both platforms are cut from the same cloth, there are significant advantages and disadvantages to both. 

Today we will attempt to simplify the offerings of both complex services and provide potential investors with an idea of which brokerage may best suit their needs.

Product Offerings

Interactive Brokers has long been regarded by many as the go to option for traders seeking international exposure.

IBKR offers one of the most expansive product offerings on the market with access to forex, metals, 100s of international markets, and a multitude of currencies, including the recent addition of 4 cryptocurrencies (Bitcoin, Litecoin, Etherium, and Bitcoin Cash).

Meanwhile, TradeStation fails to offer trading of any international market exchanges, forex, metals, or fractional shares. 

Additionally, IBKR allows trading of thousands of free low or no cost mutual funds and bonds, while TradeStation requires mutual fund and bond transactions to go through broker assistance.

Nevertheless, in comparison to many online brokerages, both IBKR and TradeStation have a substantial amount of products available to their customers.

Trading Experience

Novice investors beware; although both brokerages have made significant efforts to simplify the overall trading process, both trading platforms remain technically complex.

IBKR’s TWS and TradeStation 10 are loved by many advanced investors for the ability to customize their trading experience and are known to possess a multitude of charting and trading analyses.

Nevertheless, both companies are intent on making their trading experience accessible to the beginner investor and both continue to simplify the buy/sell process, in addition to creating numerous educational courses and tutorials for their respective products.

Both companies offer multiple trading experiences through a desktop, browser enabled, and mobile platform.

Pricing and Commissions

Interactive Brokers offers two different account versions for its users known as IBKR Lite and IBKR Pro, both of which consist of slightly different pricing and pros and cons of their own. 

For a better understanding of these options we recommend you check out our 2022 review of Interactive Brokers. 

TradeStation and IBKR both provide commission free options for investors trading US based stocks and ETFs 

However, IBKR Lite and all of TradeStation’s offerings utilize payment for order flow practices that allow the respective brokers to sell client orders to market makers that in return pay to execute the trades themselves, often keeping the bid/ask spread. 

This practice allows both parties to offer commission free trading to their clients in exchange for less favorable price execution.

Nevertheless, Interactive Brokers clients that opt for the IBKR Pro model are not subject to payment for order flow and their trades are executed efficiently and directly.

Moreover, both companies offer a tiered commission structure for active, high volume clients that lowers significantly based on the number of monthly transactions achieved. 

Options and Margin

TradeStation, depending on your plan selection, offers pricing of $.50 or $.60 per contract, the lowest of which is the best baseline in the industry.

IBKR option fees are $.65 per contract and are decreased down to $.15 per contract with sufficient trading volume in their tiered IBKR Pro plan.

For general options trading, TradeStation probably offers the better option for low cost trading, with the exception of investors that plan to trade high volumes of option contracts.

As far as margin trading is concerned Interactive Brokers maintains its hold on industry low rates. Starting at just 2.58% for its Lite users and as low as .75% for high value Pro Investors.

Meanwhile TradeStation’s starting rate is 9.5%, but does reach as low as 3.5% for its largest margin users.

For investors interested in large margin use, IBKR certainly offers a huge price advantage over the competition.

Fees

While Interactive Brokers does charge its clients for broker assisted trading support, it largely avoids the use of account fees, as an attempt to expand its market reach.

TradeStation, on the other hand, is known to exact a large amount of recurring fees on certain investors. 

For example TradeStation charges investors a $50 inactivity fee per year, although this fee can be waived by maintaining an account value over $2000 or by conducting at least 5 transactions per annum. 

Furthermore, TradeStation charges its users one of the largest exit fees in the industry of $125 for the closure of an account. TradeStation clients that hold an IRA are charged $30 annually and a one time fee of $50 for closing. 

Interactive Brokers does not charge its clients for closures.

Research and Education Resources

Although neither brokerage is known for its ease of use or expansive educational library, their approaches do differ. 

Interactive Brokers offers its clients a number of free courses and seminars, largely aimed at improving technical and analytical skills. 

Additionally, IBKR offers a vast amount of both free and subscription based news and market data.

TradeStation is in the process of overhauling their own educational content, but they do currently offer a number of free resources that help new investors to better understand and utilize the TradeStation 10 application.

Overall, while neither is perfect, Interactive Brokers provides the most options for investors seeking to receive the majority of their market data, news, and research through a single platform, albeit for a cost.

Final Thoughts

Due to the complex nature of both firms’ pricing models, we highly recommend checking out both the Interactive Brokers and TradeStation websites for further information. 

In our eyes, advanced investors and traders looking to up their technical skills should take a serious look at both TradeStation and IBKR as great platforms for learning and growth.

While IBKR does offer an expansive amount of international products, both companies allow traders access to a much higher level of investing opportunities than many of the traditional online brokerage platforms.

For newer investors, both TWS and TradeStation 10 may seem like overwhelming options, but we believe they may present fantastic learning opportunities, in combination with the respective platforms' commission-free trading options. 

Overall, both Interactive Brokers and TradeStation are masters of the advanced trading platform space and continue to take concrete steps to compete with the new age of low cost online brokerages.

With a continued focus on mainstreet investment trends and developments, we believe both companies have the potential to to maintain their technical advantage, while carving out additional space in the market.

The post Interactive Brokers vs TradeStation appeared first on Wall Street Survivor.

Interactive Brokers Fees – How Does Interactive Brokers Make Money?

Interactive Brokers has done their best to lower and eliminate fees for investors. Overall, Interactive Brokers provides one of the best trading platforms and market access across the board for one of the most compelling price points and margin rates across the industry.

With such great pricing, many experienced traders use IBKR to make the most of their large trading sizes and volume.

Nevertheless, how does the Interactive Brokers platform perform for the average investor, and does their cost model make sense for smaller, low volume, buy and hold accounts?

According to Forbes, IBKR “generates revenue from four primary sources – Net Interest Income, Commissions, Trading gains, and Other income.” 

For the purposes of this article we will discuss the basics of the IBKR commission structure, in addition to some of the more obscure avenues through which Interactive Brokers makes its money.

Interactive Brokers Fees: IBKR Pro

For large, experienced investors and traders, IBKR Pro offers unsolicited access to its advanced Trader WorkStation application, in addition to top of line research, early market access, and dozens of other algorithmic trading options.

The Pro plan is split into a fixed and tiered option, both of which offer traders a 1.5% interest rate on margin use that is lowered all the way to just .5% for the highest volume traders.

The fixed option offers traders a price of $.005 per share, maxing out at 1% of the total trade value, while completely eliminating exchange fees, clearing fees, and pass-through fees.

On the other hand, the variable option allows larger volume traders to pay just $.0005 per share when they exceed 100,000,000 shares traded per month. 

Despite commissions, neither IBKR Pro or IBKR Lite account holders have account minimums or are charged any inactivity fees, a rarity amongst brokerages. 

Interactive Brokers Fees: IBKR Lite

In contrast with IBKR Pro Plans, IBKR Lite users can trade US Stocks and ETFs commission for free at any volume. 

Nevertheless, Interactive Brokers does charge free Lite users higher rates on margin coming in at 2.5%. For traders looking to trade large volumes on margin, this hike could make a significant difference to returns.

Additionally, lite traders pay a flat per-contract fee for options at .$65 and .$85 per future contract, as opposed to Pro users that operate on a variable scale that lowers significantly per contract based on their overall monthly volumes. 

Although IBKR Pro does offer significantly lower rates for high volume traders, both the Pro and Lite options offer traders 100% free trading of any US mutual funds.

Moreover, perhaps the biggest difference between the IBKR Pro and Lite services is their execution of orders. Users of IBKR Lite will have their orders routed through market makers through the acceptance of payment for order flow.

Payment for order flow, on its surface, doesn’t seem to affect investors, but it may prohibit orders from being executed at the best prices, as market makers generally profit from the bid/ask spread.

IBKR Pro users do not have to worry about this process, as their orders are routed through an exceptional order routing system that completely excludes payment for order flow operations.

Interactive Brokers Fees: Cryptocurrencies

Luckily for all potential investors, Interactive Brokers takes a one fit all, streamlined approach to its cryptocurrency trading commissions that is completely based on a tiered volume structure.

For all crypto transactions, IBKR charges a minimum fee of $1.75 (but no more than 1% of trade value), while lowering percent trade value commissions from .18% of trade value to .12% based on per month trading volumes. 

This commission structure is completely transparent and concrete across the board, and IBKR does not add any spreads, markups, or custody fees to transactions. 

At the moment, Interactive Brokers offers clients the ability to trade Bitcoin, Etherium, Litecoin, and Bitcoin Cash through their platform, in addition to a plethora of other crypto-based indices and trackers. 

Furthermore, Interactive Brokers just recently launched their Crypto platform in 2021. It’s expected that their offerings will largely expand over the next several years. 

Research, News, and Market Data

For beginner investors, Interactive Broker’s news and research application can be extremely intimidating.

In contrast with other established online brokerages, IBKR offers an enormous amount of market data and research to its clients, although many require an additional subscription.

Many modern brokerages offer news to their clients free of charge through stock specific notices and updates. These brokerages do include some general market news but are largely focused on specific watchlists.

IBKR, on the other hand, has decided to allow its investors to pick and choose from the best and most prominent news organizations and journals from around the globe.

Many of these options are free of charge, but Interactive Brokers allows the purchase of others a la carte or in cost reduced packages.

For some prospective investors, these offerings may seem over-expensive compared to other brokerages, but IBKR retains only 5-10% to cover administrative costs, paying the rest to associated vendors.

Conclusion

In this article we covered Interactive Brokers‘ commission structure, in addition to their revenue from news partnerships and payment for order flow agreements. For our full review on all aspects of Interactive Brokers, click here.

For potential investors, IBKR offers a compelling argument on multiple fronts, depending on a trader’s individual circumstances.

Experienced traders will find Interactive Brokers to offer one of the most cost effective pricing structures available with incredibly low margin rates and variable commissions. 

Furthermore, beginner or novice traders may find IBKR’s Lite program a great place to experience and learn an advanced trading platform, while paying 0 commissions on trades involving US stocks and ETFs.

Although somewhat complex, for prospective traders seeking more information on the differences between the Lite and Pro offerings, Interactive Brokers offers a simplified video synopsis. 

Overall, Interactive Brokers does profit from commissions and payment for order flow, but the company maintains a large focus on generating revenue through net interest income. 

The practice of growing new interest income revolves around acquiring and maintaining a great relationship with clients, as a firm can only grow interest on further funds from its investors.

In our view, this relationship will incentivize IBKR to remain at the top of its class for providing a cost-conscious, advanced, full service trading platform for its investors.

The post Interactive Brokers Fees | How Does Interactive Brokers Make Money? appeared first on Wall Street Survivor.

Is Interactive Brokers Safe?

The last thing investors should be worried about is the safety of their brokerage. In this review we will be discussing the reliability and safety of the Interactive Brokers platform.

For investors looking to expand their investment skills and portfolio in the US and abroad, what does Interactive Brokers offer and do they provide a history of prestige and trustworthiness?

Interactive Brokers' History

Interactive Brokers is an international firm that prides itself on one of the most inclusive offerings of US and internationally based equities on the market.

Headquartered in Greenwich, Connecticut, the firm’s over 2600 employees focus on making Interactive Brokers one of the premier institutions for investors of all sizes and backgrounds.

Unlike most brokerage firms, Interactive Brokers operates as a standalone broker-dealer. This distinction allows the company to provide its investors with a uniquely focused experience that comes without an overly expansive balance sheet.

This standalone nature allows IBKR to solely focus on its investors, without having to worry about group-wide liabilities and policies that could force its hand in times of recession or crises. 

Operating since its founding nearly 45 years ago, Interactive Brokers Group, Inc. conducts over 2,204,000 trades per day for its clients, half of which are located outside of the United States.

Nevertheless, Interactive Brokers is more than just a brokerage.

After creating the first handheld computers for trading in 1983, the firm has continued to develop its technological edge over its competitors and offers its clients some of the most cutting edge and advanced trading software available. 

In addition to a comprehensive mobile platform, Interactive Brokers provides its investors with its flagship trading platform Trader Workstation, a single product that allows trading of stocks, options, futures, currencies, bonds, and funds on over 150 markets worldwide.

Furthermore, the company prides itself on offering its clients one of the most inexpensive trading options available, with commissions maxing out at 1% of trade value for free users. 

Meanwhile, customers that subscribe to the firm’s IBKR Lite program trade US stocks and ETFs commission-free.

Is Interactive Brokers Safe and Credible?

Rated investment grade by Standard & Poor’s, Interactive Broker’s mission to “Create technology to provide liquidity on better terms. Compete on price, speed, size, diversity of global products and advanced trading tools.” has not changed since its inception in 1978.

The firm prides itself in its ability to protect its customers' interests and takes a number of steps to ensure that its clients are protected and insured through any event or circumstance.

Despite its approval by the Commodity Futures Trading Commission (CFTC), Interactive Brokers chooses not to invest its clients' assets in money market funds due to concerns surrounding foreign sovereign debt. 

Additionally, Interactive Brokers Group, Inc. holds over 10 billion dollars in equity capital, despite the required minimum being just over 6 billion.

Moreover, the company covers all of its investors' capital with insurance and is regulated by the US SEC and CFTC and is a member of the SIPC, in addition to dozens of other regulatory bodies surrounding the globe. 

In 2020 Interactive Brokers surpassed 1 million client accounts and now holds over 170 billion dollars in client equity.

The company has been widely recognized by many as the best firm for international trading and receives an A+ safety rating from the Better Business Bureau.

Interactive Brokers receives 5/5 stars in 2022 from Barrons, StockBrokers.com, and ForexBrokers.com for its exceptional commitment to client satisfaction and offerings. 

The firm also received recognition from Investopedia as its #1 rated brokerage firm for international trading and for advanced traders. 

Payment for Order Flow

One of the biggest cons of modern commission-free brokerages is that they make a significant portion of their money by selling investors’ orders to market makers that in return execute trades.

The problem with this process is that investor orders are often not prioritized, and market makers generally profit off of playing both sides of the trade and receive the difference between bid and ask prices.

The issue for investors is they often do not receive the best prices through this practice and it regularly costs unknowing investors money each and every time they place a trade.

Interactive Brokers may not charge commissions to its IBKR-Lite clients for US Equity trading, but it does subject their orders to payment for order flow, allowing the firm to receive some compensation.

Nevertheless, for clients that opt for IBKR-Pro this practice does not exist and traders are free to execute orders as they please, without worrying about the negative consequences involved in payment for order flow practices.

Interactive Brokers Security

Interactive Brokers takes its customers’ security seriously and provides a variety of resources to protect its clients’ accounts and information.

The firm utilizes a unique secure login system that offers either a dual factor authentication through its mobile application or a free physical security device that allows investors to further protect their accounts. 

Furthermore, for clients with portfolios exceeding $1,000,000 IBKR are offered a digital security card that requires login attempts to utilize a pin, challenge code, and an enormous amount of varying code combinations. 

Additionally, IBKR’s security features include auto-logouts automatically and will also lock a customer’s account after a number of repeated login failures. 

The firm also prides itself in its 24/7 account monitoring capabilities that is backed by an experienced support team, responsible for verifying and authenticating suspicious trades with investors. 

In fact, in 2020, Interactive Brokers did not suffer a single outage throughout the year and reported 0 significant data breaches throughout the same term. 

Customer Service and Support

A great platform and pricing are great, but how does Interactive Brokers offer support when something goes awry? 

As a firm, IBKR has historically struggled to provide top of the line 24/7 support for its clients, generally choosing technology and cost over premium services.

Nevertheless, over the last few years that trend has significantly reversed. 

Interactive Brokers has developed a new artificial intelligence tool called “IBot”.

IBot helps to direct investors to commonly used FAQs and solutions, streamlining the support process.

Clients who are in need of a support representative can call any number of IBKRs toll free support lines 6 days a week from anywhere in the world. 

Additionally, users that wish to speak with a representative without calling can use Interactive Broker’s cost free live chat service. 

These features, in addition to the ability to submit tickets online, allow IBKR to service its clients 24/7, without compromise.

The Negatives

Although Interactive Brokers has a long history of outstanding credibility and trust, in 2020 IBKR agreed to pay the Securities and Exchange Commission 38 million dollars in a settlement surrounding the company’s failure to report suspicious transactions to authorities.

The case, regarding the account of a user that was used to commit fraud, accused Interactive Brokers of disregarding a number of red flags associated with suspicious transactions. 

Additionally, on the same day, the Financial Industry Regulatory Authority (FINRA) fined IBKR $15 million for failures in its anti-money laundering program. 

Final Thoughts

Overall, Interactive Brokers is an excellent, safe option for investors looking to expand their investing portfolio all under a single umbrella of the IBKR platform.

With access to 150 markets, 33 countries, 25 currencies, and crypto, Interactive Brokers has it all, and IBKR is notorious for providing an excellent experience for even the most seasoned traders.

Although the firm experienced some turbulence in 2020 with several regulatory fines, Interactive Brokers has a long track record of credibility and trustworthiness. 

Furthermore, with its large capital reserves and overcaution with investors' funds, we believe IBKR has the unique ability to protect its investors in the event of a severe financial crisis, especially without the liabilities that coincide with the majority of bank-owned brokerages.

If you are interested in learning more about the Interactive Brokers platform, check out our 2022 review of IBKR and whether it might be a good fit for you. 

The post Is Interactive Brokers Safe? appeared first on Wall Street Survivor.

If you're looking to get into investing but you're not ready to put your hard-earned money at risk, or you just want to practice your trading skills, a stock game could be a great option for you.

Stock simulation games allow you to “paper trade,” or invest with virtual cash.

A good simulator will imitate the market in real time.

So you can invest your fake cash in real stocks, bonds, and other securities to get a real indication of how your portfolio would have performed if you had invested real money.

In this article, we'll list our favorite stock games for students that want to get into investing.

Best Overall Stock Game for Students: Personal Finance Lab

Personal Finance Lab

Teachers who use Personal Finance Lab can assign their students a customized curriculum.

PFL offers over 300 lessons teachers can assign that meet state and national standards for financial education.

These lessons come complete with quizzes and help set students up to succeed in the stock game and the budgeting game (and in real life)!

The stock game lets students trade risk-free with virtual money. 

The teacher can change settings such as regular cash deposits, trading rules, and which lessons they want to correspond with the stock game.

The teacher can also track students’ performance and activity in their portfolios.

The Budget Game allows students to simulate the real-life responsibilities of managing income, paying bills, and dealing with unexpected life expenses. 

Students progress through a simulated calendar, with each day bringing new surprises.

Events in the game are random and decision trees are based on probabilities.

A student might be faced with a flat tire or a necessary clothing purchase.

They can choose whether to charge these expenses to a debit or credit card, which will effect their financial situation further on in the game.

Pricing for Personal Finance Lab starts at $10 per student for the Budget Game.

Adding the stock game brings the price to $20 per student, and there are discounts for classes with a higher number of students.

Best Free Stock Game for Students: HowTheMarketWorks

HowTheMarketWorks

HowTheMarketWorks is another great stock simulation game.And the best part about it is that it’s absolutely FREE!
When you sign up for HTMW, you get a virtual portfolio worth $100,000 that you can trade with as you please.

You can also create custom contests to compete against your friends and family.

HTMW hosts national contests that you can enter to win real prizes!

The Education Center also helps you learn investing tips that can help your virtual portfolio as well as your real one.

Like Personal Finance Lab, HowTheMarketWorks can also be used by teachers and students in the classroom.

Teachers can customize their students’ trading parameters and lessons.

Best Stock Game for Quick Learners: MarketWatch

MarketWatch

MarketWatch, the popular stock news platform, has a feature called the Virtual Stock Exchange that you can use to paper trade in real-time.

You can trade stocks, bonds, ETFs, options, fractional shares, and more.

You can also create or participate in custom games with unique rules.

The best part about MarketWatch is that it is a wealth of educational material on investing, personal finance, and more. 

So while you’re trading virtual money, you can also learn more about the stock market and the types of securities you’re trading.

It’s a win-win!

Final Thoughts

The above stock games are great for students who want to practice on their own, as well as teachers who want to bring financial education technology into their classrooms.

Be sure to check them out and create your own trading contests for friends and family!

The post Best Stock Game for Students appeared first on Wall Street Survivor.

WallStreet Survivor Rules

1. Registration Period – The registration dates for WallStreet Survivor are displayed in the “Contest Parameters” on the “Accounts Balance” page. WallStreet Survivor administration reserves the right to limit or turn off registrations as it deems necessary.

2. Trading Period – The trading period for WallStreet Survivor is displayed in the “Contest Parameters” on the “Accounts Balance” page. Participants may place orders any time after market close one business day prior to the Trading Start date. Those orders will execute at the market open on the Trading start Date.

3. Initial Cash Balance – At the beginning of each new challenge, participants will be given an initial cash balance of virtual funds in their portfolio account that can be used to make simulated buy or sell transactions as described in more detail below.

4. Eligible Securities – WallStreet Survivor offers a wide variety of over stocks that are listed on the, NYSE, AMEX, NASDAQ and the selected international exchanges being offered. In order to be considered for trading, stocks and or securities must meet specific criteria including pricing, market capitalization and average daily volume. In addition, the security must also be traded on a recognized marketplace. To see which stock exchanges are available for this simulation click on “Trade Stocks” under the “Make a Trade” tab, and then click on the drop down arrow under the heading labeled “Exchange”.

There are several ways to find out whether your stock or option is on the list:

• Symbol: If you know the symbol of the security you are interested in, get a quote for that symbol.
• Name: If you know the name of the security you are interested in, you can determine whether or not it is available for trading from the “Symbol Lookup” page.

5. Order Types and Trade Execution – Market, limit, and stop orders can be accepted for stock orders (as well as option orders where applicable) at the discretion of the site administrator. All orders for the stocks on US exchanges are executed at the real-time bid/ask prices as provided by our data vendor when placed during market hours. International exchanges other that than USA will display a delayed price estimate of the price until 15-20 minutes has elapsed. The transaction will automatically appear in the Trader's Portfolio and Transaction History.;

Market orders placed while the markets are closed or before the market opens will be executed as market conditions permit shortly after the market opens. If the stock requested has not traded that day then the trade will be cancelled. Trades placed after market hours can be viewed in the Pending Orders screen. Pending orders can be cancelled until 25 minutes past the hour prior to the exchanges open on the day the trade is scheduled for execution in its market country. Pending market orders placed on halted stocks will be cancelled if trading does not resume by the end of the day. Limit and stop orders may be placed as “Day” orders which are good for the day only, or as “GTC” orders, which are good until cancelled.

Options orders are buying and selling long positions of calls and puts using market, limit and stop orders. Each account is limited to a certain amount of trades during trading period (to verify the maximum of trades limit, refer to the “Contest Parameters” on the Account Balance page).

Some exchanges may use delayed pricing data to execute orders. Exploiting these delayed prices to gain profit in a contest portfolio is not allowed, and is grounds for disqualification.

6. Commissions – Each trade will incur a broker commission fee set by the site administrator which will be subtracted from the participant’s virtual cash balance. The commission fee structure is displayed in the Contest Parameters table on the Account Balance page.

7. Buying on Margin – This simulation may or may not permit you to “buy on margin”. If buying on margin is enabled for this simulation, it means that the participant can borrow additional fictitious funds from the fictitious broker/dealer based on an initial margin requirement percentage and a minimum marginable stock price. When applicable, these margin requirements are displayed in the Contest Parameters table.

8. Splits, Dividends and other Corporate Actions – Most stock splits, dividends, and other corporate actions reported by the news wires will be accounted for after the markets have closed and prior to the next market opening. These situations may cause account values to be misrepresented until the reconciliation occurs for next open business day.

9. Trading Halts – Halted, restricted, and blocked stocks will not be available for trading. Any trade that is confirmed after trading has been halted will be reversed.

10. Cancelling Market Orders – Participants cannot cancel market orders placed during market hours.

11. Position Limit – Position limits are set by the site admininsatror and can be verified by referring to the “Contest Parameters” on the Accounts Balance page.

12. Discrepancies – Participants should report any account discrepancy within one (1) week from the transaction date. Simulator Support Services Group will, at its sole discretion investigates and adjust any legitimate discrepancy. Discrepancies reported after one (1) week may or may not be adjusted. To contact the Support Services Group click on “Contact Us” at the bottom of the page and fill out the brief form. Replies are usually sent within 24 hours by return email.

The Simulator Support Services group also may conduct routine audits of any portfolio during or after the trading session to ensure all portfolios are free of pricing or corporate action errors. The Simulation Support Services group may correct any such discrepancies at any time, including after the trading period has ended. The results of these audits and any portfolio adjustments are final and not subject to appeals.

13. Transaction Limits – Participants may invest a maximum percentage of their simulated portfolio value in any one stock. The transaction limits may also vary by security type. To verify the transaction limits which apply to this simulation, refer to the “Contest Parameters” on the “Account Balance” page. There is also a limit on the total number of transactions that may be placed in any given contest. Please also refer to the Accounts Balance page to see this limit, along with how many trades that have already been placed in your portfolio.

14. Day Trading & Short Selling – Both may or may not be allowed for the purposes of this simulation.

15. Interest – You will earn interest on positive cash balances in your account and interest will be charged to your account for on margin loans. Interest rates for this simulation are displayed in the “Contest Parameters” on the “Account Balance” page.

The post Rules appeared first on Wall Street Survivor.

Just two years in, the 2020s are already making their claim to be the most prolific and tumultuous period in modern history.

Between a seemingly endless global pandemic, climbing interest rates, international war, and inflation levels not seen since the 1980s, the buzz surrounding the longest bull market in US history continues to grow.

Many investors continue to ride the wave of rising asset prices, despite a growing number of recession indicators.

Nevertheless, many believe the time of the bulls is finally nearing its end.

With May just around the corner, the age-old saying of “Sell in May, and Go Away” may just see its biggest test in a decade.

For generations, investors have preached this adage as fact, and for many decades it was. 

From the early 1950s until around 2013, the stock market underperformed between the summer months of May and October.

The past nine years have proven this summer slump to be fallible with some incredible summer performances.

Yet it seems this sun run may finally come to a head if economic indicators continue to sour.

Should you Sell?

Financial stability and safety can seem like a balancing act in times of economic turmoil.

It can be incredibly difficult to ascertain whether or not to sell, buy, or just hold in such periods. 

These moments become especially confusing when everyone and everything seem to have conflicting opinions and agendas.

So what should investors turn to in times of doubt?

Summer Stock Tip #1: Rebalance Your Portfolio

Rebalancing your portfolio, or in other words selling or buying assets to change your percentage asset allocation, can be a great way to develop or return to your chosen risk tolerance.

In fact, in times of increased unrest, divesting riskier stocks or assets from your portfolio could prove to be a powerful tool in lowering risk, while shoring up a ready cash position. 

For investors that are unsure of their risk tolerances, age and financial obligations can provide a great starting point for those looking to determine acceptable risk. 

For example, older investors, nearing retirement age, may not be willing to risk short term volatility in the market, and could rebalance their portfolios to reflect their desire for stability.

These changes can be made through trimming down riskier positions or shifting into more conservative, defensive stock and bond positions.

Younger investors with less financial responsibilities might consider rebalancing their portfolios to a more aggressive mix that includes foreign equities and small- and mid-cap stocks.

Timing the Market 

Although it may seem like simple advice to just buy low and sell high, the modern world and economy can be extremely complex. 

Due to these complexities, very few investors outperform the market, and even fewer are able to outlast its returns over a lifetime.

According to the Los Angeles Times, over a 20 year period, 86% of active US equities funds were outperformed by the S&P Composite 1500 index. 

If these hedge funds cannot beat the market, how should the average American invest?

Well, that brings us to our second tip!

Summer Stock Tip #2: Index Funds

Even some of the greatest stock market investors of all time respect the power of passive investing.

In the words of Warren Buffett “I recommend the S&P 500 index fund, and have for a long, long time to people.”

The great Mr. Buffet, AKA the Oracle of Omaha, knows that most active managers fail to beat the market, and almost all of them fail to do so consistently over a long period of time.

So essentially what the Oracle is saying is: if you can't beat 'em, join 'em.

An S&P 500 index fund allows you to track the stock market, or match its exact returns.

Historically, the market as a whole has gained an average of about 8% per year over long investing horizons.

So instead of pulling your hair out trying to beat the market, why not buy into an S&P 500 index fund that will turn you into a millionaire by the time you retire?

Summer Stock Tip #3: Dollar-Cost Averaging

For the majority of investors, especially those with little time at their disposal, investing over the long-term in passive funds can provide extraordinary results.

One of the greatest tools for investing over the long term is Dollar-cost averaging.

Dollar-cost averaging is a term that means to invest your money in smaller portions at regular intervals of time, rather than investing it all at once.

If you were to take all of your money you have available to invest and put it in the stock market at once, it could immediately drop and put you way into the red.

But when you dollar-cost average, you adjust your average cost basis, making it easier to stomach big drops in the market.

By consistently investing in small increments over longer periods of time, investors can greatly reduce the effects of market volatility and timing.

Summer Stock Tip #4: Remember the Fundamentals

It can be easy to watch the stocks in your portfolio rapidly rise or fall and think to yourself: “it's time to sell! I need to lock in the gains I've made.”

But at the end of the day, if you're a fundamental investor, then you've done your homework and you know what the intrinsic value of the stock is.

Your goal isn't to capture short-term gains by timing the market.

Your goal is to buy and hold stocks that you think are undervalued and wait until they've reached their true value. THEN, you sell.

So keep in mind, a price swing isn't always a good reason to sell a stock.

You should think about whether there's been a change in the fundamentals that alters the true value of the stock before you sell.

Summer Stock Tip #5: Relax

This is the tip that some worried investors really need to hear right now.

If you've followed the steps above, then you're making regular, safe investments into a diversified, well-balanced portfolio.

There's no sense in pulling your hair out over what the market is doing or may do in the near future.

If you let your emotions get in the way and start panic selling or buying, you'll likely regret it later.

The fact is that the market has historically gone up over the longterm, so as long as you're a long-term investor, you have nothing to worry about.

After all, if the stock market as a whole comes crashing down, we'll have more important things to worry about, right?

Sell in May and Go Away?

With the combination of dollar cost averaging and maintaining an acceptable risk tolerance through portfolio rebalancing, passive investors may even embrace the summer slump.

By following sound investment rules and strategy and avoiding the panic and fear of timing the market, investors can take advantage of any potential buying opportunities, while enjoying the greatest perk of the summer lull: the weather.

The post 5 Summer Stock Tips for Your Portfolio appeared first on Wall Street Survivor.

What if I told you, you could compete with your friends, and win real money, while you learn and practice?

Well, with the Wall Street Survivor Spring 2022 Trading Contest, you can!

Sign up today for a chance at $2000 in prizes!

Here's how it works

Prizes

• Leader at the halfway point of the contest (April 29th): $250
• First place overall: $1000
• Second place overall: $500
• Third place overall: $250

Contest Calendar

April 4th: Contest Begins – SIGN UP HERE! April 29th: Halfway Point May 2nd: Winner of Halfway Point Prize Announced May 27th: Contest Ends June 2nd: Winner of the Spring 2022 Trading Contest Announced

Contest Updates

Contest Rules

• Each individual is allowed only one portfolio in any contest.
• Winners will be contacted by email to receive their prize. This must be the email address associated with your account. If you need to change your email address, contact support@wallstreetsurvivor.com.
• Every contest has a starting portfolio value of $100,000 USD, allows only US equities, ETFs, and cryptocurrency.
• Day trading and short selling are permitted in all contests.
• 500 max trades per account.
• 25% position limit.
• Margin trading is not allowed.
• All winners will be audited, and disqualifications will take place at our team’s sole discretion.
• Winners must claim their prize within 30 days of the results being announced.
• We may ask winners to provide a photo ID upon claiming their prize as part of our auditing process.

We can't wait to see you go for the gold in the Spring 2022 Contest! SIGN UP NOW and compete for $2000 in prizes!

The post Spring 2022 Trading Contest appeared first on Wall Street Survivor.

eToro is one of the leading social investing platforms out there today.

The company started off as a cryptocurrency platform and has evolved into a community where you can trade equities as well as copy other investors’ strategies.

Today, we’re going to be talking about whether or not eToro is a safe platform to use.

What Is eToro?

eToro is a social trading platform that allows users to trade stocks, cryptocurrencies, and forex as well as keep up with the investing strategies and patterns of other users.

The company is based in Tel-Aviv, Israel, and its CEO is Yoni Assia.

eToro was founded in 2007, but the groundwork for the social investing platform that eToro is today was really laid in the early 2010s.

The platform has over 25 million registered users in over 140 countries.

eToro lets you trade cryptocurrencies as well as use their very own crypto wallet.

Investors located outside the U.S. can trade CFDs, which means contracts for difference.

These are derivative contracts based on the difference in the current value of the security and its value at the time of contract expiration.

Stocks and ETFs are also available to customers in certain locations, and eToro expects to expand the reach of their equities offerings.

eToro also offers other special features such as a virtual portfolio and stock news and analysis.

One of the main features that makes eToro unique is the CopyTrader feature.

CopyTrader lets you duplicate the portfolio of another investor at the push of a button.

You can look up top traders that fit your style and then easily mimic their strategies.

These top traders get paid as part of eToro’s Popular Investor program in return for allowing users to copy their portfolios. Everybody wins!

How Does eToro Make Money?

eToro is a commission-free trading platform for stocks; you won’t pay any fees when you make an equity trade.

So if trading is free, how does eToro make money?

Firstly, eToro makes money on the spread. 

When we refer to the “spread” when discussing stocks, we’re talking specifically about the bid-ask spread.

The bid-ask spread is the difference between the highest amount a buyer is willing to pay for a stock (the bid price) and the lowest amount a seller is willing to sell the stock for (the ask price).

When the bid price and ask price are different, the brokerage makes money by processing orders.

This is because they can simultaneously sell a stock for a higher price and buy it at a lower price. 

The spread for stocks that trade at at least a decent volume is usually no more than a few cents, but this really adds up for brokerages when they’re processing millions of trades.

eToro also makes money by collecting fees, especially on cryptocurrency services.

For example, the company charges a 1% fee any time you buy or sell cryptocurrency on their platform.

If you’re using the eToro Money Wallet for your crypto, you’ll also pay a 0.1% conversion fee to convert one coin to another.

There’s also a 0.5% transfer fee (minimum of $1, maximum of $50) when you transfer funds from your eToro brokerage account to the Money wallet.

eToro also charges miscellaneous fees for certain optional services.

For example, if you decide to transfer your eToro account to another brokerage, you’ll pay a $75 ACATS fee. 

You’ll also pay different fees for paper services, wire transfers, and other services.

These fees are typical among most brokerages and are easily avoidable depending on how you use the platform.

Is eToro Legit?

eToro has tens of millions of users and over a decade of experience under its belt.

But is eToro legit? Does the platform really do what it promises to do?

We’re happy to say that yes, eToro is legit.

The platform certainly provides the services it claims to provide.

You can trade stocks, ETFs, and cryptocurrency (with restrictions in certain states). 

Equities trades are truly commission-free, and there aren’t any hidden trading fees.

eToro is transparent about the fees it does charge for crypto services and miscellaneous services, as they provide you with a full fee schedule.

Is eToro Safe?

So, is eToro safe?

Well, we think that eToro’s years of business in the investing world and millions of users speak for themselves.

But if that wasn’t enough, eToro is a member of both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

This means that eToro is heavily regulated by the government, just like many other big investing platforms.

FINRA is a nonprofit organization that oversees broker-dealers and individual stockbrokers. 

It is not a part of the federal government, but it is overseen by the SEC.

FINRA licenses and makes rules for any entity that sells stocks/

The SEC is a government agency that serves to protect investors.

It has the power to enforce securities laws and bring suit against people who commit financial crimes.

They are the executive agency that fights against insider trading, pump-and-dump schemes, securities fraud, and the like.

eToro is also a member of the Securities Investor Protection Corporation (SIPC). 

The SIPC is the nonprofit organization that takes care of investors who lose money due to their brokerage going out of business.

This means that your stocks and deposited cash are protected in the event that eToro goes out of business and you’re unable to liquidate the assets in your account.

Of course, the SIPC does not cover you if you simply lose money on a stock; it’s only if your brokerage can’t give you the money already in your account.

So to answer your question…

…yes, eToro is safe!

Keep in mind that cryptocurrencies are not insured.

Final Thoughts

As you can see, eToro is a safe, legit platform.

They provide legitimate services and charge honest fees.

If you’d like to read our full review of the eToro platform, you can click here.

The post Is eToro Safe? appeared first on Wall Street Survivor.

What Is eToro?

eToro is a social trading platform that allows users to trade stocks, cryptocurrencies, and forex as well as keep up with the investing strategies and patterns of other users.

The company is based in Tel-Aviv, Israel, and its CEO is Yoni Assia.

The platform has over 25 million registered users.

How Does eToro Work?

eToro has several different sides to its business.

This includes the ability to trade different asset classes, copy top traders’ portfolios, and trade virtual currency for practice.

Let’s talk about the different features available on eToro.

eToro Features

Stocks

eToro currently lets you trade over 1700 stocks.

You’ll be able to find your favorite companies and easily invest in them or learn how others are investing in them.

ETFs

eToro is currently beta testing ETFs for U.S.-based customers.

ETFs are currently only available in 44 states.

Cryptocurrency

Crypto is where eToro got its start.

eToro was one of the early adopters of crypto trading and it functions as a full crypto exchange.

You can trade over 40 cryptos on eToro, such as Bitcoin, Ethereum, and Dogecoin.

CFDs

eToro also lets you trade CFDs on cryptocurrencies.

A CFD is a contract for difference.

This contract is an agreement between two parties that states that one person will pay the other person the difference between what the current price of the underlying security is and what the price is at the time the contract expires.

Think of it as a derivative contract where the underlying security never actually changes hands.

You’re essentially betting on what the price of the security will be without having to buy or sell the security,

One person is betting that the underlying crypto will go up in price while the other is betting that it will go down.

And the loser will have to pay up!

Watchlist

You can create a watchlist by adding stocks and cryptos that you’re interested in.

Any securities that you add will populate your Watchlist page, where you can see them all in one place.

The watchlist shows you the price, gain or loss percentage, and chart for each security.

You can also see the 52-week price range for each security as well as analyst sentiment.

The sentiment will tell you whether most analysts are rating a security as buy, hold, or sell.

You can easily trade your favorite securities from the Watchlist view.

Social Investing

One of the features that makes eToro so unique is its social aspect.

The platform is essentially bridging investing and social media!

The “copy trading” feature lets you automatically replicate another investor’s strategy or portfolio at the click of a button.

You can look at how top investors are trading, and what securities they’re fans of right now.

These top investors get paid when you copy their strategies through eToro’s Popular Investor Program.

Virtual Portfolio

eToro also has a Virtual Portfolio feature. 

The Virtual Portfolio allows you to paper trade, or trade virtual money as practice for real investing!

The Virtual Portfolio allows you to trade any security you can trade in your real portfolio.

eToro Fees

So, now that we know what eToro is and how it works, how much does eToro cost?

eToro is a commission-free investing platform for all users.

If you’re based in the U.S., you won’t have to pay too many fees to trade on eToro.

You will have to withdraw a minimum of $30 any time you want to withdraw money from your account.

If you decide to transfer crypto in or out of your eToro account, you’ll pay a fee that depends on what crypto you’re moving.

If you’re an investor located outside of the United States, you’ll be facing a few more fees from eToro.

International users will pay a withdrawal fee of $5 anytime they withdraw money from eToro.

If you’re transferring money to or from your account in a currency other than USD, you’ll pay a fee starting at 0.50% of the amount of the transfer.

There’s also an inactivity fee of $10 per month for any eToro account that has been inactive for at least a year.

Is eToro Safe?

As you’re doing your due diligence while evaluating eToro, you’re probably asking: is eToro reliable?

Well, we think that eToro’s years of business in the investing world and millions of users speak for themselves.

But on top of that, eToro is a member of both the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

This means that eToro is heavily regulated by the government, just like many other big investing platforms.

eToro is also a member of the Securities Investor Protection Corporation (SIPC). 

This means that your stocks and deposited cash are protected in the event that eToro goes out of business and you’re unable to liquidate the assets in your account.

Keep in mind that cryptocurrencies are not insured.

The post eToro Review 2022: Is eToro Legit? appeared first on Wall Street Survivor.

Have you ever wondered how your daily life as a consumer might be affected by events occurring around the world?

With everything going on right now between Russia and Ukraine, how is the world economy reacting?

Today, we're going to talk about how war and other geopolitical events affect the markets.

War and the Stock Market

Here we have a table showing some of the biggest geopolitical events of the last century along with how they affected the stock market.

As you can see, the market reactions don’t tend to be too harsh. 

The average reaction was a 5% drop, with the most dramatic reaction having been about a 20% drop.

The average amount of time for the market to recover from one of these events was 47 days, with the longest recovery time being 307 days.

The event that had the worst effect on the stock market by both of the above measures is the attack on Pearl Harbor in the early 1940s.

The reaction and recovery numbers for the Pearl Harbor attack are far more severe than the numbers for most of the other events, making it a possible outlier that’s making the data seem worse than it is.

The most recent significant geopolitical event on the table, the Saudi Aramco Drone Strike, seemed to hardly affect the market at all.

With less than a 1% initial drop, a 4% overall drop, and a 41-day recovery time, this event wouldn’t have been worth panic selling over.

So what do these numbers mean for the average investor? Is it time to sell, or do we need to stop ourselves from overreacting?

First of all, keep in mind that these events did not have any lasting effects on the stock market.

Any drop attributable to one of these events was recovered from in less than a year (less than three months in most cases). 

So it doesn’t really make sense to sell off your stocks for one of these events if you’re a long-term investor.

In fact, if you’re a true fundamental investor, a political event shouldn’t drive you to sell your investments unless you truly believe that it changes the intrinsic value of those investments. 

So the moral of the story is that, based on historical data, there’s no need to panic.

War and the Commodities Markets

The effects of war on commodities are a little more significant than with stocks.

When we talk about the prices of commodities, we’re usually referencing the price of futures contracts for certain commodities.

A futures contract is an agreement between two parties to exchange an item at a previously agreed upon price.

If futures are going up, that means that investors are expecting the price of the underlying commodity to increase in the near future.

Investors could have this sentiment for many reasons, including an expected supply constraint.

This seems to be the case for oil right now; with the threat of a ban on Russian oil, investors are likely predicting that this decrease in the supply will lead to higher oil prices.

Let’s take a look at this graphic describing the effects of war on commodity prices in the UK.

World War I caused the price of wheat to double as a result of a constriction of the supply in the UK.

The oil embargo in the 1970s led to the quadrupling of the price of oil in the UK.

The concerns around oil right now could be a preview to something more serious happening in the near future.

If you want to learn more about the current state of oil and how it’s affecting gas prices, check out our article called Why Are Gas Prices Increasing?

Final Thoughts

While not everyone is a professional futures trader who pays close attention to commodities prices, we all still see the effects of war and other geopolitical situations.

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Brent Crude surged more than 15% over the weekend due to the threat of a ban on Russian oil by the U.S. and Europe.

(Brent Crude refers to the price of crude oil forward contracts traded through the Brent Complex, a European oil market.)

Stocks are down, with major indices closing in correction territory this Monday.

Where is all this volatility coming from? Why do investors seem so pessimistic right now?

Essentially, it comes down to the fact that there is a lot of uncertainty surrounding the supply of crude oil in the world in the near future.

What will happen to the market if the oil supply is sharply reduced? Will different countries’ economies struggle and gas prices soar? Will any world leaders step in to alleviate the problem?

These are all questions that investors are asking themselves, causing oil futures prices to rise and stocks to fall.

So Why Are Gas Prices Increasing?

What does a possible ban on Russian oil have to do with gas prices here in the United States?

As we know from economics class, the more scarce a good is, the more expensive it becomes. 

Oil is no exception to this rule. 

If gasoline becomes more expensive to import to the U.S., then importers will have no choice but to raise prices for distributors.

And distributors will have no choice but to raise their prices as well, which will eventually translate into a price increase for the consumer at the gas pump.

What Can We Do About Gas Prices?

Luckily, many world governments are looking to stand up to Russia and protect the world economy.

The International Energy Agency, an alliance of countries that aims to defend against disruptions in the oil supply, has decided to release about 60 million barrels of oil in order to counteract the possible effects of a shortage caused by Russia.

The United States will be releasing about half of this total from its reserves.

The idea is that by physically bolstering the world's oil supply, we can keep prices somewhat stable and avoid an economic crisis.

Are Any Other Investments Doing Well?

When the market starts to look shaky, many investors will pull their money out of stocks and derivatives and place it in “safe” investments like gold. 

It looks like that's what's happening here as well, as gold has reached its highest price in years.

When Was the Last Time Oil Was This High?

Although the current oil price hasn’t touched its all-time high (yet), it’s inching ever closer.

In 2008, oil reached about $147, a result of the global economic crisis that occurred due to the collapse of the U.S. housing market.

Although we hopefully aren’t looking at economic consequences as strong as the ones in 2008, some economists believe that the Ukraine situation will be enough to drive oil prices above their all-time high.

What Happens Next?

Hopefully, the measures being taken by countries around the world will be enough to quell the threat of an economic crisis.

But there's always a chance that things won't go the way we want them to, and in this case, that means that the world's economies could be looking at a period of stagflation.

Stagflation is when you have no economic growth (stagnation) combined with inflation.

Prices increase and the consumer's dollar becomes less and less powerful, and there's no growth to match the inflation.

This can lead to a serious economic downturn as the economy struggles to function normally.

Final Thoughts

Let's not get too ahead of ourselves, though; the economy is still under control for the time being.

While it might be a pain to fill up at the gas station right now, keep in mind that these high prices won't last forever.

The post Why Are Gas Prices Increasing? appeared first on Wall Street Survivor.