Shares for Beginners - "No Master Has Fallen From Heaven"
No matter how you try to make your money - whether in real estate, insurance, gold, mutual funds, ETFs, warrants, or stocks - you need to study it and understand it. Buying an apartment as an investment property without understanding how the real estate market works is highly speculative! It's the same with stocks. Then take your money and go to the casino. Then at least you have an entertaining evening.
If you still decide to invest in stocks, we have 10 tips in this article that you should pay attention to as a beginner.
1) Understand how stocks and the stock market work
Before you begin, you should deal intensively with the topic of "stocks". It is also important to know how the stock market works. There are countless articles and videos on this topic on the Internet. Here are just two examples:
- Shares simply explained (explainity® explanatory video)
- Stock market price simply explained (explainity® explanatory video)
2) Create a sample depot
Many online banks offer free sample deposits to get used to the topic of stocks without risk. Simulate buying and selling stocks and get a feel for how it works.
3) Only buy what you understand
4) Be aware of the fees
Pay attention to the fees involved in buying and selling stocks. As a rule, the fees at online banks are cheaper than at your house bank. Also pay attention to the custody account fees, which can be high at some banks. In addition to the fees, you have to pay tax on your winnings. Here is an example where you can learn more about the fees: Exchange Fees: What Does Stock Trading Cost?
5) Don't put everything on one card
6) Never speculate on credit
7) Invest your money long term
Allow time for your investment. You won't get rich overnight! That only happens in films or in extremely rare cases. Congratulations if you are one of these people! The Deutsches Aktien Institut has one study publishes that over the past 50 years the DAX has achieved an average return of 8.9% per year for any investment period of 20 years.
Don't panicif there are temporary price drops. If the economic success of the company is not endangered, they should simply “sit out” the price slump.
8) minimize losses
Why is that so important? If you make a loss of 50% on a stock, the stock must then rise by 100% to get the original stake back. Here is an example: The share of the company "BlumenSocks" has a share price of 80 euros. It drops by 50% to 40 euros. In order for you to get your money back, the share must rise again from 40 to 80 euros. That is an increase of 100%. Of course, the fees are not yet taken into account here.
If you had placed a stop loss at 72 euros when buying the share at a price of 80 euros (that is 10% below the purchase price), the share would have been automatically sold as soon as the price had fallen below 72 euros. Your goal should be to minimize your losses. "An end with horror is better than a horror without end".
The stop-loss order - know how (boerse.ARD.de)
9) Don't trust a stock market expert
One tool for this is the application www.transparentshare.com. Here, stocks are objectively rated with 12 key figures.
Try TransparentShare free for 14 days. Without specifying a credit card.
10) Dare to go ahead and learn
Do you still want to invest in stocks now? Then you have to ask yourself whether you are ready to devote the appropriate time to it. Well worth the time.
I wish you every success and fun investing in stocks.
Stocks for beginners: You can find more interesting articles on our website.