Interested in knowing more about the Eurozone economy? Then use the Eurostoxx as an indicator. The index comprises around 50 companies, classified according to their market capitalisation. With Eurostoxx 50 data, you can optimise your portfolio management, especially if you’re thinking about investing in an index fund.
In this special report, you will find out everything you need to know about the Eurozone's main stock market index. Why and how did it come into being? What does it consist of and how can you become an investor? Let’s find out!
How can you invest in the Eurostoxx 50?
Improvisation is strongly discouraged if you are thinking of investing in Eurostoxx. In order to be successful, you will need to go through a few basic steps, which will include:
- Registering on eToro
- Verifying your account
- Making a deposit
- Searching for "EUSTX50" in your search bar
- Starting to trade
Tutorial for investing in the Eurostoxx 50 Index
Before making an investment in the Eurostoxx 50, take the time to find out about the steps that need to be followed beforehand. This way, you can be sure that you are making a truly profitable investment.
Choose an online broker before investing in the Eurostoxx 50
First of all, you need to choose a good stockbroker, also called a broker. This is a professional who acts as an intermediary between the entity providing the securities to be traded and the investor.
Generally speaking, you will have a platform that allows you to find a position on the stock market.
The most important thing is to make sure you're working with the right broker. In this case, consider checking:
- The rules and security of the platform
- The fees to be paid
- The financial products you can use (forex, bonds and shares, among others)
Make sure to compare two or more trading platforms to find as much information as possible. eToro, for example, is a leading broker.
Investment in EUSTX50
What is the Eurostoxx 50 ?
Traders and investors rely on the stock market index as the best indicator to find out more about current market trends. Thus, you can access better management of your portfolio without having to consider your status.
Each country has a stock exchange as a reference, and the Eurostoxx 50 is the European one. With this index, you have access to European markets only.
What is the definition of Eurostoxx 50?
Eurostoxx 50 is a stock market index of the Eurozone. It represents European companies that use the euro as their exchange currency
The Eurostoxx 50 is made up of around 50 companies that are leaders in their field of activity. All of these companies are from the Eurozone, including Belgium, France, Italy, Portugal and Spain among others.
History of the Eurostoxx 50 Index
Before investing in the Eurostoxx 50, it is worth looking at its history.
Brief history of the Eurostoxx 50
In 1998, the Swiss Stock Exchange and Dow Jones decided to create STOXX as a joint venture. Around 2009, Dow Jones withdrew from the group. Six years later, Swiss Exchange shares were sold to Deutsche Börse.
Deutsche Börse is currently the sole owner of the STOXX and has a number of indexes to its credit. The best known are the Euros Stoxx Europe 50, Euro Stoxx 600 and Euro Stoxx 50.
How did the index evolve?
Many people are mistaken about the origins of the Eurostoxx 50, thinking that it comes from Europe. However, an American organization is behind its creation. Note that the launch of the Eurostoxx 50 dates back to 1991.
The index was originally designed to serve the interests of American traders interested in European financial markets. All investors can use it to learn more about the eurozone market.
At its inception, Eurostoxx had already proven itself with a total of 1000 points. Around the year 2000, it reached a record 5464 points.
There have been some dark periods in its history, notably 1992 when it went down to 920.
Around 2009, the Eurostoxx finally landed on the stock market with a first quotation of 2890.00.
Current capitalisation of the Eurostoxx 50
Eurostoxx is an index that groups together different companies from the major European countries that use the euro.
Which companies are listed on the Eurostoxx 50?
The composition of the Eurostoxx 50 is constantly changing and every year the managers go through a review. Around September, they include a list of companies in the index based on various criteria including:
- The 600 market capitalisations of the Eurozone
- The stability of each company
Various large firms are grouped together in the Eurostoxx, including 18 French companies, 13 German companies and 6 Dutch companies.
The Eurostoxx 50 price
The value of a security is the price of a stock on the financial market for a specific period. The Eurostoxx 50 price is based on a balance between demand and supply.
The current price of the Eurostoxx 50
Currently, the Eurostoxx 50 is characterized by a stable price. In October 2020, it was € 3193, 09. More than 6287 thousand indexes have been sold so far.
Other figures include:
- A quotation of 3193,09 € at the beginning of the day on October 05, 2020
- A high value of 3190.93 as of October 02, 2020
- A low value of 3147.28 on October 02, 2020
Factors influencing the price of the Eurostoxx 50
Since the beginning of April, the Eurostoxx price has experienced significant variations. Several factors need to be taken into account:
What is the economic context of the Eurostoxx 50?
In order to better understand the fluctuations of the Eurostoxx, it is important to take this first detail into account. Both recession and growth are used to evaluate the Eurostoxx 50 price.
Inflation and the Eurostoxx price
Inflation is also a factor influencing the price of this index. It must be taken into account in analysis.
The situations of the various companies
The economic and financial situation of the companies that make up the Eurostoxx also influence its value.
Other factors to consider
The value of a stock index varies according to:
- Eurozone policy allowing this index to rise or fall in value.
- Inter-country relations which may deteriorate and have a negative impact on the evolution of the index.
Investing in the EUSTX50
Follow the Eurostoxx 50 directly
By following the Eurostoxx 50 live or Eurostoxx directly can help you in your trading. Here are several different applications, including:
- Trading View with information about index fluctuation, news about the index and news from the financial market.
- Les Echos Investir to follow the news on Eurostoxx quotation, variations or highest prices.
Eutostoxx 50 price forecast
The index could move up to 3300 points if demand continues to grow. Otherwise, the index could lose value and drop to 2991 points, as was the case in 2014.
However, it is still possible to make profits by following the best strategies and using day trading or scalping trading.
The advantages of trading the Eurostoxx 50
This index allows you to benefit from many advantages.
The undeniable advantages of a liquid index
The Eurostoxx 50 has been a benchmark for the Eurozone since 1991. It is a liquid index that can be used for various derivative products, including:
- Euro Stoxx index
- Euro Stoxx 50 future
- Euro Stoxx futures
An index for portfolio diversification
As Eurostoxx50 represents many European and French companies, including Sanofi, Vivendi, and L'Oréal, there are many advantages in investing in it. At the same time, you can access other markets in this area. In doing so, you will find many stocks and quickly gain access to a solid and diversified portfolio.
Using CFD to make a profitable investment
Consider using a CFD broker if you want to make a more profitable Eurostoxx 50 investment. According to financial experts, more and more investors and traders are starting to opt for this method. You can bet on the downside or the upside. However, there are still risks of losses to consider with this technique.
Some tips for investing in the Eurostoxx 50 in beginner mode
You can invest in the Eurostoxx 50 even without any specific skills. You just need to use the right techniques.
Choose a broker
It is important to bet on the right trading site by ensuring that you are working on a platform that is perfectly secure.
Choose the broker who guarantees services and tools that meet your criteria before you invest in the Eurostoxx 50.
With this in mind, you can always rely on eToro which is governed by various organizations and offers you a quality experience even as a beginner. All of this is thanks to Copy Trading.
Practice in "demo mode »
It is best to test a trading platform via a demo account before investing and placing funds. With this virtual account, you learn more about the strategies while using fictitious funds. This way you get used to the platform.
Create an action plan
Before entering into stock trading, you would do well to ask yourself some questions. For example, is the investment compatible with your goals and your budget? An action plan will help you decide.
How much do you intend to invest in the Eurostoxx 50? You might as well plan ahead so that you can move on to the next transactions, despite the possible losses you may encounter. In addition, define the investment strategy that suits you best (day trading, scalping trading, etc.).
Follow stock market news
Economic, social or even political events can have an impact on the euro area. Thus, it is important to follow the news in these areas. This can help you anticipate the trend to make the best buying and selling choices.
What about the Eurostoxx investment for 2020?
The Eurostoxx may fluctuate, but is nonetheless still an interesting investment as long as you use the right strategies. Above all, you need to use a good and secure platform. There are several reliable platforms to choose from on the market, but the reviews published by many experienced traders will help you make a smart choice.