eToro vs IB, if I want to buy and hold for 1 or 2 years?

[rtrcam]

And to invest on S&P 500

 

[selmareed]

@rtrcam With IB you actually own the stock, for example you have voting rights as a shareholder. On the other hand etoro states that they buy the stock in your behalf (if you have cash account they say that it is not CFD - contract for difference). But personally, they gave me no evidence that you actually own the stock.

What it means for you? With IBKR you actually own the stock and have all the rights as shareholder. With Etoro you don't but it is very simple and easy to use.

If I were you, I would choose IBKR. But always make your own research and decision, don't trust random people on internet.

Good luck with your future investing.

 

[rtrcam]

@selmareed Thanks

 

[mikehu]

@selmareed I'll play the contrarian: Did you ask IB for proof of stock ownership? My guess is that if you call the securities depository the only name in their records is that of IB. Your certificate ownership is most likely indirect/beneficial but only exists in the broker's ledger. Not that this makes it less safe, I'm just making the comparison fair. Full disclosure, I use IB myself.

 

[evietheturtle]

@mikehu IB holds the shares in their name, but that's just done for technical reasons. Legally you are still the owner of your shares.

While at eToro you usually just own a contract with eToro itself, that says that eToro has to pay you the difference of future value change.

 

[peteinna]

@evietheturtle What about xtb? How does it compare to IB in this aspect?

 

[evietheturtle]

@peteinna XTB is like eToro, mostly CFD instead of the real assets.

 

[witbos]

@rtrcam IB, without a doubt. You actually own the stock you buy (unlike eToro). Very low fees, wide availability of instruments (now you say you want to buy and hold s&p500 stocks, who knows what you will want to trade in 5 years), rock solid reputation with retail and even institutional investors. Lowest margin rates in the market. They don't send you spam emails about new products etc..

Extremely poor charts (use Tradingview for charts if you really need). Very complex platform (desktop) to use, but browser and mobile apps are very easy.

 

[kingshellie]

@rtrcam IB, better reputation

 

[1hope4all]

@rtrcam Ib 100%

 

[resjudicata]

@rtrcam lol, IB for sure, etoro is like a meme

 

[avgjane19]

@rtrcam eToro is a tremendous joke. IB 100%.

 

[brandon091405]

@rtrcam i have been using etoro for 2 years now, to buy and hold and so far have no reasons to complain.

 

[ephai]

@rtrcam I agree with most of the others here that etoro is a bad choice; but broker choice aside, I think that if you are planning to withdraw your investment in 1-2 years investing in the stock market is a bad idea in any case.

There's no telling what the s&p500 will be in two years. If it was 15 years then sure, but less than 5 years? Yeah, it could do whatever. I wouldn't risk that unless I knew I could keep holding for much longer.

 

[nich4him]

@ephai Had you invested 20k you would now have 100k

 

[ephai]

@nich4him And if I had invested it all in, I dunno, Tesla at a certain time then I'd have a heck of a lot more.

Now, of course investing in the S&P500 is nowhere near as risky as investing in a single stock; but over such a short timeline it's still a gamble, and the thing about gambles is that sometimes they pay off nicely... sometimes.

EDIT:

Also, for the record, if you had invested 20k in SPY 1-2 years ago now you'd have about 25k, not 100k.