How to Buy Telehealth Stocks – Buy Telehealth Stocks Beginner’s Guide 2021

Fact Checked by Gary McFarlane

When the majority of the world went virtual in 2020, so did the majority of medical services. And these were delivered by telehealth companies. The primary goal of Telehealth companies is to provide medical treatment and/or advice remotely. Needless to say, telemedicine has been around years before the pandemic, but the resultant lockdowns and social distancing underscored its dire need. As the pandemic highlighted the dire need for telehealth services, the surge in demand spelled good tiding for the investors in telehealth stocks. Even as the biting effects of the pandemic are abating, telemedicine has become entrenched in mainstream healthcare services. 

Throughout this guide, we will run down everything you need to know before buying telehealth stocks. We’ll explain the pros and cons of buying telehealth stocks, along with a review of the best brokers to use and a simple step-by-step guide on how to go about it. 

#1 Broker to Buy Telehealth Stocks – eToro

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How to Buy Telehealth Stock – Step by Step Guide 2021

There are several Telehealth stocks in the market, with even more brokers to choose from. While this may be a good thing, for some, it may result in choice paralysis, especially for beginner investors and traders. Here’s a simple step-by-step guide on how to buy Telehealth stocks. 

  • Step 1: Register for an eToro account: The first step towards buying Telehealth stocks is signing up for a trading account with eToro – a reliable and easy-use broker. Just head on to their website, click “Join Now,” and proceed with the straightforward registration process
  • Step 2: Account verification: After signing up, you’ll be required to verify your identity. All you need to provide is your proof of ID – driver’s license, passport, or national ID card, and proof of residence such as bank statement or utility bills. This is in line with regulatory compliance.
  • Step 3: Deposit funds into your account: When your eToro account has been verified, the final step towards your journey of buying Telehealth stocks is to deposit funds into the account. Simply scroll to the bottom left of your dashboard and click on the “Deposit Funds” tab. With eToro, you can fund your account with PayPal, Neteller, Skrill, debit/credit card, or direct bank transfer. 
  • Step 4: Buy Telehealth stocks: You’re all set to buy Telehealth stocks! Simply search the Telehealth stock you intend to buy, such as CVS, click the “Trade” tab, enter the amount you intend to spend, and click the “Open Trade” tab. Note that you can buy as many Telehealth stocks as you can afford. 

Where to Buy Telehealth Stocks – Choose a Broker

As we mentioned earlier, there are several brokers to choose from. And to ensure you’re not hit with choice paralysis, we’ve curated the best brokers you can use to buy Telehealth stocks. Here’s our in-depth review.

1. eToro – The Best Overall Place to Buy Telehealth Stocks

Launched in 2007, eToro has rapidly expanded its operation to more than 140 countries serving over 20 million traders and investors. And although stock trading was officially launched on eToro in 2013, the broker is the most preferred for stock trading. This is primarily thanks to its convenience, excellent security, and innovative features designed for beginners and experienced traders.

Security and Privacy 

Everyone wants the peace of mind that comes with knowing that their investments are safe and secure and won’t vanish overnight. This is the peace of mind that eToro’s security features give you. The broker is multi-regulated and complies with strict regulations by different financial sector regulators globally, including FCA, CySEC, ASIC, GFSC in Gibraltar, and FinCEN, and FINRA. Your data is secured with SSL encryption, guaranteeing that only you have access to your personal information. 

eToro also keeps clients’ funds in segregated bank accounts to prevent any losses in the unlikely event of liquidation. More so, the broker automatically provides all clients with private insurance covering all tradable assets up to 1 million GBP, EUR, or AUD.

Features

eToro is designed to suit the needs of novice and expert traders. For beginner traders, eToro Academy offers a free curated library of tutorials on all matters trading. They can also benefit from the Social Trading function of the platform. Here, investors can openly exchange ideas with other investors and copy trades from experienced traders profiting from their expertise. You can choose to copy specific trades from the top-performing traders using eToro’s CopyTrader function or copy entire portfolios with eToro Investment Portfolios (CopyPortfolios).

eToro Fees

Fee Type Amount
Deposit Fee $0 
Withdrawal Fee $5 
Inactivity Fee $10 monthly
Commission Fee 0%

 

Pros

  • Copy trading
  • Strictly regulated 
  • Commission-free trading 
  • Free eToro Academy

Cons

  • Unavailable MetaTrader support

68% of retail investor accounts lose money when trading CFDs with this provider.

2. TD Ameritrade – Traditional Platform to Buy Telehealth Stocks

Founded in 1975 and headquartered in Omaha, Nebraska, TD Ameritrade is one of the oldest and largest brokerage houses. Its success has been driven by a wide range of assets, tools, and comprehensive industry education. The broker is especially ideal for those who prefer trading the “traditional” capital markets products. 

Security 

TD Ameritrade doesn’t compromise on security. According to them, they go to great lengths to protect your information and financial assets, and they do. It uses 128-bit SSL on its website to encrypt personal data. If that’s not enough for you, the broker implements the use of User Verification Phrase, which is assigned to every account on registration. You can use this phrase to identify genuine employees and representatives of TD Ameritrade. 

That’s not all. Clients will be reimbursed for losses incurred from any unauthorized activity in their account through its Asset Protection program. It is also regulated by the SEC and FINRA. It is a member of the Securities Investor Protection Corporation (SIPC), offering customer protection of up to $500,000. The broker also avails a $149.5 million worth of securities protection for each client and $2 million in cash protection through supplemental coverage.

Features 

TD Ameritrade provides a seamless trading experience thanks to its industry-leading technology and personalized education, equipping every client to become a smarter investor. As a multi-asset brokerage, you have access to 8 classes of investment products – more than enough to diversify your portfolio. This, coupled with the various portfolio analysis tools provided by the broker, you can plan and evaluate your trading and investment strategies. You also have access to free professional market research from the broker and third parties delivered to the thinkorswim trading platform. This is TD Ameritrade’s proprietary and intuitive trading platform.

With the broker, you also have access to cash management services and Dividend Reinvestment Program (DRIP), which offer an incredible opportunity to earn passive income. With DRIP, you can opt for full or partial enrollment and invest in over 5000 stocks and ETFs.

TD Ameritrade Fees

Fee Type Fee Amount 
Commission 0% on stocks (option contracts attract fees)
Deposit Fee $0 
Withdrawal Fee $0 
Inactivity Fee $0 

 

Pros

  • Commission-free trading on stocks and ETFs
  • Customized educational content and newsfeed
  • A range of proprietary trading platforms to suit different traders
  • A large selection of tradable assets

Cons

  • No fractional stock trading
  • The thinkorswim trading platform can be a bit complex for beginners

68% of retail investor accounts lose money when trading CFDs with this provider.

3. Robinhood – Easiest Platform to Buy Telehealth Stocks

Arguably one of the most popular trading apps for millennials, Robinhood has had unprecedented success in the past few years. It was launched in  2013 and has garnered more than 22.5 million active users in such a short period. 

Security

Although Robinhood suffered some setbacks in its early days, it has since implemented a host of impressive security measures to safeguard client data and funds. Apart from the usual password safety and two-factor authentication, Robinhood encrypts all personal data using the Transport Layer Security (TLS) protocol. In terms of fund safety, clients’ securities and cash deposits with Robinhood are protected by SPIC. Securities are insured up to $500,000 and $250,000 for cash claims. The broker is also regulated by the SEC and also maintains membership with FINRA.

Features

Note that Robinhood is only available as a mobile trading app. The broker’s product line includes stocks, ETFs, options, gold, and cash management services. With cash management, users earn interest of 0.30% APY. They also receive a debit card which they can use for daily expenditures. The broker also runs a referral program and earns up to $500 in stocks. Users also have access to a free library of educational content and investment basics. They can also subscribe to 3-minute daily financial news. 

Robinhood Fees

Fee Type Amount
Commission 0%
Inactivity fee 0
Spread Variable

 

Pros

  • Easy to use
  • Cash management services
  • Commission-free trading
  • SIPC insurance

Cons

  • Limited product offering
  • Lacks advanced trading tools

68% of retail investor accounts lose money when trading CFDs with this provider.

Buy Telehealth Stocks – Broker Price Comparison 

If you still have a tough time picking from these three brokers, here’s a snapshot of their features.

Broker Commission Deposit Fee Withdrawal Fee Inactivity Fee
eToro 0% $0  $0  $10 a month after 12 months with no login activity
TD Ameritrade 0% on stocks (option contracts attract fees) $0  $0  $0 
Robinhood 0% $0  $0  $0 

 

What are the Different Ways to Buy Telehealth Stocks?

There are three ways that you can invest in telehealth stocks. In addition to buying the stocks, you can also buy Telehealth ETFs and CFDs. Here’s a quick explanation of the three ways you can invest in Telehealth stocks. 

Stocks

Buying stocks is the simplest way to invest in Telehealth companies. When you buy stocks of a Telehealth company, you are a direct shareholder of that company and effectively are one of its owners. As a shareholder, you have a say on how the company is run through voting and are entitled to a share of its profits. Typically, buying stocks is often preferred by investors who are in it for the long haul. This investment strategy offers the highest opportunity for passive income since the shareholder earns dividends and profits from the appreciation of the share price.

Contract For Difference (CFDs)

CFDs are the exact opposite of stocks. CFDs derive their value from the underlying shares of a company, and since they are derivatives, it means you can invest in any company with a CFD without buying its actual shares. Since you don’t own the company shares, this means you aren’t a shareholder and thus cannot lay claim to dividends and do not have the voting rights that would normally be accorded to shareholders. Despite this, trading CFDs ensures that you profit from the price fluctuation of the company shares. For example, if you believe the share price will rise, you go long, and when you believe the share price will drop, you short the CFDs. 

CFDs are typically used for shorter-term trading compared to investing in stocks. Traders often use leverage when trading CFDs which significantly increases their profitability. However, using leverage also poses a higher risk of liquidation. 

Exchange-Traded Funds (ETFs)

An ETF is a single tradable security comprised of several underlying assets, which means that an ETF derives its value from the underlying securities. There are ETFs for virtually every conceivable asset in every sector. They can be designed to represent securities in one sector, for example, Telehealth ETFs, specific indices, debt instruments, specific investment strategies, etc.

You could say that an ETF is a collection of securities traded for the price of one. Its price fluctuates throughout the day, reflecting the fluctuation of the underlying securities. Although ETFs are derivatives, buyers of ETFs can earn dividends from the underlying stocks just as shareholders would. 

Best Ways to Buy Telehealth Stocks

Naturally, the different ways to buy Telehealth stocks we’ve discussed above are not suitable for every type of investor. Let’s discuss which type of investor stand to gain the most from each of these investments. 

Buy Telehealth CFDs

Short-term traders, particularly day traders, generally prefer CFDs. Thanks to leverage, traders can open and close multiple positions with the potential for higher returns. This strategy is best suited for traders with a strong understanding of technical analysis since it involves the usage of technical indicators. The goal here is to buy low and sell high when going long, and sell high and buy low when shorting. Note that since leverage is involved, proper risk management measures must be applied to limit the losses. 

Buy Telehealth Stocks

Buying the shares of a Telehealth company is reserved for those investing in the company’s financial success. Several reasons could drive the decision to buy Telehealth stocks – you believe that there will be increased demand for the company’s services, that efficiency will improve thanks to new technologies, or the increased cost of traditional healthcare services. Regardless of your reasons, the bottom line is, you anticipate that the share prices will rise. More so, the increased profitability also means higher dividends. However, you also stand to incur losses should the company perform poorly. This means that the share price will drop, and the chances of receiving dividends are slim to none. 

Buy Telehealth ETFs

ETFs are generally recommended for risk-averse investors. Contrary to CFDs and stocks, buying an ETF exposes you to several securities, which sufficiently diversifies away from the systematic risk of a particular sector. You can also buy ETFs that are entirely composed of Telehealth companies. A perfect example of this is the NASDAQ listed The Global X Telemedicine & Digital Health ETF (EDOC). The ETF comprises 41 companies across five countries, with a 63.7% exposure to Health Care stocks.

Are Telehealth Stocks a Good Investment?

Telehealth companies thrived during the pandemic as the coronavirus overwhelmed the traditional medical establishments, and many countries implemented nationwide lockdowns and enforced social distancing rules. Telehealth companies like American Well (AMWL) capitalized on this demand resulting in the wildly successful IPO in Q4 2020. 

That was then. As the global economy drags itself back to normal, some analysts envision that the demand for telemedicine will drop. While this is yet to be seen, some telehealth stocks like Teladoc Health (TDOC) have dropped more than 125% between January and November 2021, while others like Anthem Inc. (ANTM) have gained more than 50%. 

Whether the drops result from knee-jerk reactions or not, it is fair to say that there’s a disconnect in the sector, and you should conduct thorough due diligence before investing. Here are some of the factors you should consider.

Increased Adoption

As is in any sector, increased adoption of the core services often leads to higher demand. The math here is simple – increased demand equals increased revenue. This should be the first fundamental aspect you watch out for. For example, in the US, the inclusion of telehealth services in Medicare by Congress led to increased demand, contributing to the stock market boom witnessed in the sector. Going forward, keep an eye on further favorable legislative initiatives and support from insurers and employers. 

Rising Healthcare Costs

The rising cost of healthcare services will drive demand for tech-based platforms that offer quality medical services at reduced costs. The rising costs are primarily associated with the increasing prevalence of chronic diseases and the geriatric population. Telehealth providers can successfully step in and fill the void left by traditional healthcare by bridging the distance and cost barrier. 

Buying Telehealth Stocks – What are the Risks?

As we’ve mentioned, 2021 has been a mixed bag for telehealth stocks. Naturally, different companies have their risk and growth outlooks, but in general, the whole sector is at risk from cybersecurity threats and technological barriers. 

Cybersecurity Threats

The rise in ransomware attacks in the healthcare industry poses a significant threat, especially to telehealth companies. Notably, a cybersecurity breach could spell doom for telehealth companies and their investors. 

Technological Barriers

Telehealth companies rely on technology to deliver their services. They heavily rely on a high-speed internet connection and the latest hardware with sufficient storage to seamlessly integrate and transmit real-time medical data. These are not universally available, which significantly limits the reach of telehealth services.

How to Buy Telehealth Stocks with eToro

Getting started on a new platform can be gruelling, even when you have the best broker. That is why we’ve created this simple step-by-step guide on how to buy Telehealth stocks on eToro. 

Step 1: Open an account with eToro

Your initial step to buying telehealth stocks is to create a live account with a trusted and reliable broker. We recommend eToro since it offers the best trading experience for beginner and experienced traders. All you have to do is go to eToro.com, click “Join Now,” and proceed with the straightforward registration process.

Step 2: Verify your account

After successful registration, you must verify your account to start trading. This is a fairly straightforward process – you only need to provide your identification document (national ID card, passport, or driving license) and proof of address (bank statement or utility bill).

Step 3: Fund your account

This is your final step towards buying telehealth stocks. After your account has been verified, you can deposit funds by clicking the “Deposit Funds” tab at the bottom left of your dashboard. EToro allows deposits via PayPal, Skrill, debit/credit cards, direct bank transfer, and Neteller. 

Step 4: Buy Telehealth Stocks

Deposits on eToro are usually instant. That means you can immediately go ahead and buy any Telehealth stock (or stocks) of your choice. Simply search the Telehealth stock you intend to buy, for example, CVS, click the “Trade” tab, enter the amount you intend to invest, and click the “Open Trade” tab. That’s it! 

Conclusion 

If the past couple of years has taught us anything, it’s that timely access to healthcare services and professional advice is invaluable. Telehealth companies provide exactly that. We’ve discussed the different ways you can invest in telehealth stocks and the best broker to trade with. 

eToro – Best Broker to Buy Steel Stocks

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Our score10
  • Buy over 800 stocks with 0% commission
  • Social trading network
  • Copy over 12 million traders and investors
0% Commissionstart TradingOur score 10

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About Samwel Fedha PRO INVESTOR

Fedha Samwel is a freelance financial analyst with over 5 years of experience covering the global stock market, Forex, crypto, and macroeconomics. He is currently pursuing a CFA charter and is an avid champion of simplifying the intricate world of finance for all.