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Investing in the fintech sector has captivated many investors, especially with the rise of digital payment platforms revolutionizing the financial landscape. While Stripe isn't publicly traded yet, you can still get in on the action with some of its competitors that are already on the stock market. Here are a few big names to consider:
- PayPal Holdings, Inc. (NASDAQ:PYPL): A giant in the payment processing world, PayPal is accepted by almost 80% of the largest retailers in North America and Europe.
- Adyen N.V. (PINK:ADYEY): Adyen provides merchants with various ways to process payments, making it a strong player in the fintech arena.
- Payoneer Global Inc. (NASDAQ:PAYO) Payoneer is another noteworthy competitor, offering cross-border payments and working capital solutions for businesses worldwide.
These companies offer similar growth potential and innovation in payment processing. Here’s a quick guide on how you can invest in these fintech companies while you wait for Stripe to possibly go public someday:
- Open a Brokerage Account: If you don’t already have one, this is your first step.
- Do Your Homework: Research these companies to understand their business models, financial health, and growth potential.
- Invest: Once you’re ready, you can buy shares of selected candidates.
- Monitor your investment regularly and set a stop-loss to protect yourself from potential losses.
- Mitigate potential risks.
By keeping an eye on these competitors, you can still ride the wave of fintech innovation and growth, even without direct access to Stripe stock.
Step 1. Open A Brokerage Account
To find the best brokerage company for you, compare the fees, terms, and how easily you understand the platform and the brokerage company's services.
In this article we will use eToro as an example, to show how you can open such account:
| Step | Action |
| 1 | First you need to register your account. Registration is free, after it, it is not necessary to start investing immediately. You can first use this account to practice with a virtual portfolio eToro demo account. |
| 2 | Provide your personal details, such as your name, email address, and password for your account. |
| 3 | Verify your email address by clicking on the link sent to you in an email from eToro. |
| 4 | Enter additional information, including your date of birth, address, and phone number. |
| 5 | Upload a copy of your government-issued ID (such as a passport or driver's license) and a proof of address (such as a utility bill or bank statement) to verify your identity. |
| 6 | Fund your account using a variety of payment methods, such as credit/debit cards, bank transfer, or e-wallets. |
Step 2. Do Your Homework
After deciding where to buy stocks, the next step is to research the company to see if it aligns with your financial goals and strategy.
Start by understanding what the company is, its history, past performance, associated risks, competitive standing, and growth strategy.
Then check the company’s annual and quarterly reports, balance sheets, income statements, and third-party evaluations. Key financial metrics to review include revenue, net income, earnings per share (EPS), debt-to-equity ratio, return on equity (ROE), and the price-to-earnings (P/E) ratio.
Additionally, consider industry trends, competition, management quality, and macroeconomic conditions, and keep up with analyst opinions, latest news, and investor sentiments.
To decide how much to invest, analyze your financial situation considering these factors:
Step 3: Investment Amount and Risk Tolerance
To decide how much to invest, analyze your financial situation considering these:
| Factor | Description |
| Time Horizon | How long you plan to hold the investment. It can be short-term (less than a year), medium-term (one to five years), or long-term (more than five years). This affects your risk level and expected returns. |
| Risk Tolerance | How much risk you're willing to take. This depends on your financial situation, goals, and personal preferences. Higher risk can mean higher returns, while lower risk aims to preserve capital. |
| Goals | What you want to achieve with your investments, such as building wealth, generating income, preserving capital, or saving for specific needs like retirement or education. |
Before deciding on the investment amount and contribution frequency, ensure you have:
- An emergency fund covering 3-6 months of living expenses.
- A budget that accommodates your investing strategy.
Step 4. Place An Order
Once you determine how much you want to invest, you can place your order to buy stocks. Here are the two main types of orders:
a) Market Order
- Definition: An order to buy or sell stocks at the current market price. The trade executes at the best available price at the moment.
- Use: When you want to buy or sell stocks quickly, regardless of the exact price.
b) Limit Order
- Definition: An order to buy or sell stocks at a specified price or better.
- Use: When you want to set a specific price at which to buy or sell stocks and are willing to wait for the market to reach that price.
Whether you choose a market or limit order will depend on your investment strategy, risk tolerance, and goals. Understanding each type's risks and benefits, along with market conditions and stock volatility, is essential before placing an order.
Step 5. Monitor Your Portfolio & Know Potential Risks
Monitor your investment regularly, set a stop-loss to protect against significant losses, and avoid overreacting to short-term market fluctuations.
Regularly review your investment strategy to ensure it aligns with your evolving goals and risk tolerance. Be aware of potential risks such as market, credit, liquidity, diversification, emotional, and company-specific risks. Mitigating these risks involves maintaining a diversified, well-balanced portfolio and staying informed.
Disclaimer: This article is not intended as investment advice. Investing involves risk, and your capital may be at risk.
