When investing money, there is no path to securities, such as B. Shares over. This is not only due to the low interest rates, but also to the fact that these have made the former investment classics such as savings accounts or life insurance unprofitable. However, if you want to become a shareholder, you have to do your research and consider possible losses. Here, you will understand all the basics of buying stocks, where to buy stocks, and step-by-step instructions on how to buy stocks. Anyone who wants to buy securities does not need great expert knowledge. With some basic knowledge, you can get started buying stocks and devising a stock strategy. Still, a basic knowledge of securities trading is essential before learning about where to buy stocks. This is the only way to weigh up the risk and possible losses.
With stocks, you benefit from corporate profits
Remember that anyone who wants to buy or sell a stock has to pay an order fee. The costs often consist of a fixed basic fee per order as well as a certain percentage of the order total. However, there is no uniform regulation for fees; models such as a fixed order fee are also possible. With one share you buy a stake in a company. When a company goes public, the value of a company is divided into shares, which are then sold to shareholders as securities. As a shareholder, you are effectively a co-owner of a company – you own shares in it. If the company generates a profit, part of this is usually distributed as a dividend to the shareholders on a pro rata basis for each share certificate.
The annual general meeting of the company decides on the amount of the dividend. If you are the owner of a so-called common share, you as a shareholder have voting rights at this meeting. If you own a preference share, you have no voting rights. In return, many companies pay preferred stock holders a slightly higher dividend. A number of public companies issue both preferred and common stocks. So that there is no mix-up when ordering, each share has a unique identification number. Under this it is traded on all stock exchanges.
The value of a share is constantly re-determined in the course of a trading day through the interaction of supply and demand. Investors speculate on the future development of the stock exchange price and the company’s profit prospects. The prices of shares therefore not only reflect an objectively determined value of a company, but also the expectation of future development. In addition to company data, the psychology of market participants and general economic development also play an important role. Observe the price development closely and find out about stock analyzes and stock recommendations as well as possible risks in order to get an overview of the stock market and the individual prices.
Where can you buy stocks?
To be able to order shares, you have to open a deposit. In the past, the securities account was the place – for example in a bank – where shareholders actually stored their actual shares. Nowadays, the shares are kept electronically, so you can buy any share easily online. Your custody account is the switching point through which you can quickly and clearly view your shares with your broker. When you open a deposit for the shares, you automatically get a so-called clearing account. Your share purchases are settled through this account. All dividends or other income from securities trading are initially credited to this account. When opening a deposit, you enter a reference account – for example your current account – to which all amounts will be transferred from the clearing account.
In order to be able to buy a share, investors need a so-called broker in addition to the deposit, who handles the transaction on a stock exchange. When it comes to such a transaction, i.e. buying or selling a security, experts speak of an order. The term comes from the English and means something like “order” or “order”. In the past, the classic branch bank was often used as a broker, where shareholders could place their securities orders. Today direct brokers like comdirect are a convenient alternative.
ONLINE BROKERS: SIMPLE, CHEAP, CONVENIENT
The big advantage of buying shares online is obvious: online access to your share portfolio via PC, tablet or smartphone simplifies the ordering process considerably. In addition, as a broker, comdirect provides you with many intelligent tools and information that will help you buy shares online. After opening a portfolio, buying and selling, i.e. placing buy or sell orders, is very easy and clear online. At comdirect, you use the order book for this. This is a tool which you can view and manage your orders centrally.
SELECTING THE ORDER TYPE
Next, you determine how your order will be carried out using the order type. With a cheapest order, your broker executes the order as soon as stocks are available to buy. Optionally, you can also specify a “limit” with which you set an upper price limit up to which you want to buy the shares. The order then runs as long as you have set the validity. In addition, there are other order types with which you can control the buying and selling of your shares very precisely. The so-called “stop-loss order”, with which you can automatically secure your share portfolio, is interesting for beginners. You specify a limit value below which – should the price fall – the share is automatically sold.
However, this is offset by risks that you should also consider. Amongst other things:
Company risk: By buying stocks, you are also assuming part of the risk of a company. In extreme cases, a company can go bankrupt, which can lead to the loss of the capital invested.
Price risk: The stock price can change at any time due to the interplay between supply and demand. The price of a company is determined both by the general market situation and by the business situation of the company itself. Both are a risk and can lead to price losses.
Dividend risk: The payment of dividends cannot be guaranteed.
Psychology of the market: The trading of securities on the stock exchange is also influenced by a psychological component.
Yes, because in this way your money works twice for you: On the one hand, a dividend is paid out for many shares, which is due on every share certificate. On the other hand, by buying shares, you have the opportunity to participate directly in the increase in the value of a company on the stock exchange through price gains . This form of investment can therefore enable high returns. However, stocks are also subject to risks, such as market fluctuations, which can affect returns. Losses up to a total loss are therefore possible. Funds are financial instruments that are mostly made up of stocks and bonds. The value of a fund grows with the individual values it contains and passes the profits on to investors. In this way, you can draw the growth in value of your investment from real economic developments, just like stocks. The advantage: Since funds are made up of various individual values, your investment is always diversified, i.e. spread over several securities. However, like stocks, funds can fluctuate in value and result in losses.