We had an interview with Yoni Assia, the CEO and Founder of eToro, the world’s leading social investment network, who has shown an interest in finance and computer science since his youth and so decided to merge his passions in 2007 when invented eToro under the vision of opening the global markets for everyone to trade and invest and a simple and transparent way.
What are the services that eToro offers?
Today eToro offers a wide variety of services in the financial markets for traders and investors. Our users can invest in leading the US and European stocks, ETF and as well as other instruments, they can also copy other people in our transparent network and they can also invest in our recently launched next generation investment product, CopyFunds, which allows the creation and distribution of thematic investment products –Top Trader CopyFunds comprising the best performing and most sustainable traders on our network and Market CopyFunds allowing investors to track a wide array of sectors based on a predefined market strategy.
Who is your target audience? Does it differ from the traditional traders?
Our target audience is generation X and Y, both financial and tech savvy, who understand that the financial markets is not a walled garden and people don’t need to be disconnected and disengaged from this ecosystem. In eToro we harness the wisdom of the crowd to make the markets accessible and clear to our users, and we see a consistent growth of users who adopt this approach, as Dr. Nouriel Roubini mentioned in his great recent report that “by 2021, 37% of respondents to the survey expect to be using social investing and trading platforms, where members can track – and automatically follow – the portfolios of others”.
What are the benefits of social trading? Are there any disadvantages?
I think that the roots of the financial markets are social, and for some reason throughout the years, walls were built around this industry. In eToro, we see that people love to talk about what they are doing in the markets, share ideas and thesis. Social trading benefits are that from one hand it helps you to learn about the markets and trends through observation as a preliminary stage of trading on your own, and from the other hand, social trading provides infrastructure for people to copy and follow the portfolios of other as a money management strategy.
I think that main challenge of the money management as an industry and social trading as part of it is the agent problem. We’ve created a set of tools in eToro that mitigate those challenges wisely and we’re keep working hard to improve ourselves.
I am a beginner at trading. How should I start?
Be patient, learn and read about the markets and the different trading strategies until you find the one that suits your temperament and characteristics. Discuss with other traders in the network about your thoughts and ideas, get feedback and hit the markets.
What are the common mistakes and best practices traders implement?
I think that the best practice to implement is to use copy trading, as in its core, social trading mitigates all the common mistakes and enforces best practices. People just need to screen the eToro community in our network and then decide which one is the favorite to follow and copy considering their preferences