Buying shares – our big guide

Buying shares is interesting for many investors, because the securities have a very good return in the long term. Trading in stocks is flexible, because you can speculate on the development of prices in the short term as well as invest in the securities in the long term.

In our article we go into why you should buy shares and what advantages the securities have. You will also learn how stock trading works, what requirements you need to meet, and how the securities are held in custody. In addition, we go into what alternatives there are and how you can avoid typical beginner mistakes.

The most important facts in brief:

  • Buying shares requires some preconditions, such as owning a securities account (open a share deposit account)
  • Shares contain as investment some advantages, like for example a historical average net yield of 7-10% per year
  • Shares are a sensible, yield-bringing part of the total portfolio and can serve flexibly as an admixture
  • Stock trading is simple, transparent and accessible to every investor through the appropriate bank or broker

Why should I buy shares?

There are some reasons why buying shares can be a good investment. One of the main reasons is the wide range of possible uses for the securities. You can use shares especially for the following purposes:

  • Short-term speculation
  • Long term investment
  • Regular purchase for asset accumulation

Share trading with the prospect of short-term speculative profits is therefore just as possible as a long-term financial investment. In addition, you can build up wealth with shares by investing a Stock savings plan Use the following.

In addition to the flexibility and the variety of uses, shares are characterized by other advantages. This includes the long-term Very good returns , over a period of at least ten years at an average of seven to ten percent per year. Furthermore, the capital that you have invested in stocks is, available at any time (liquid).

Especially the previously mentioned advantages are what make stocks a sensible part of the overall portfolio. Investment experts usually recommend that – depending on your risk appetite and investment goal – buying shares at least 20 percent of the total portfolio should consist of the securities order.

Of course, this is only a rough guideline, which must be adjusted individually for everyone. Further should be considered:

  • How long can be waived on the money for stock investments (investment horizon)
  • What is the personal savings rate (flexibility in case of unforeseen events)
  • How high is the interest and commitment to participate in the stock market

For many investors, then significantly higher proportions of shares in the overall portfolio come into question, so that 20% is rather to be considered conservative.

Things to know about trading stocks

With stock trading is primarily the purchase and sale of securities meant. Stock trading is often equated with a short-term investment, i.e. more of a speculation. In fact, stock trading also takes place if you want to invest in the securities in the long term.

Even then you have to buy shares, which may then be held in the depot for years. The most important thing when trading stocks is that you know your goals . Accordingly, you should act on the market and participate in stock trading.

How can I create a deposit account to buy shares?

Before you can buy stocks for the first time, you need to have a Securities account . This is often referred to as a share deposit account, custody account or briefly as a securities account. You can open such a stock account with various financial service providers, in particular:

  • Branch Banks
  • Direct banks
  • Online broker

Especially Online brokers are particularly favorable , because they often do not charge for opening and using the securities account. The account can now almost always be opened online, even at branch banks that also provide a securities account on their website.

What is a stock, what is an ETF?

Brief background: the share is a share certificate , Issued by a company that takes the form of a stock corporation. When you buy a share, you become a shareholder, and this gives you some rights. The main features and rights of a shareholder are:

  • Co-ownership of the corporation
  • Voting rights at the annual meeting
  • Entitled to a dividend if a distribution has been declared

The share thus implies a right of ownership in the corporation, of course only to a certain extent. The value of the share results from supply and demand , if the securities are traded on the stock exchange.

Unlike stocks, an ETF, an exchange traded fund is. The fund generally buys shares that are represented in a specific index, for example the DAX.

An ETF fund would therefore include, for example, all 30 DAX stocks in the portfolio in the same proportion as they are represented in terms of weighting in the German share index . index funds can be traded on the stock exchange like shares.

What should I do before buying shares?

Before buying stocks there are some steps you should complete. The basis is to open a depot. Before that you should have as many as possible Compare offers with each other and especially on the Pay attention to custody fees and the order fees . You can find a particularly favorable depot especially at direct banks and online brokers. Often a clear depot comparison is suitable.

Before buying shares for the first time, you should also check your Define investment goal . Do you want to speculate rather in the short term, invest longer term or build up a fortune with the shares? You should be able to answer this question before you make your first purchase.

Anyway, it is advisable that you are thoroughly informed before you participate in stock trading for the first time. These include, for example, some Watch stocks in the market and to get a picture through books and reporting.

Some questions that can help you before buying stocks to make your future actions as optimal as possible include:

  • What return do I expect from the investment?
  • What risk am I willing to take?
  • What is the total amount I would like to invest in shares??
  • How long I do not need the invested capital?

When should I buy shares, when not?

Every investor wants to catch the optimal entry point when investing in stocks. The question: When should I buy shares, when not?? hangs largely depends on your investment goals . An ideal time to buy is when share prices are at a relatively low level.

So the theory. Unfortunately, one always knows only afterwards whether the own purchase price was now favorable or expensive. However, this problem is reduced with a sufficiently long investment horizon of 10 or more years.

The more short-term your investment horizon is the more the purchase price plays an important role for your returns.

Often something plays Luck A role in whether you catch a good moment. In the context often fall the terms bulls and bears. From a so-called Bull market Volatility is the term used when prices have been rising for some time or when it can be assumed that supply will be lower than demand in the coming days and weeks.

This in turn would result in price increases. Exactly the opposite is the Bear market . The mood on the stock market is then rather pessimistic and the supply is usually (significantly) greater than the demand for securities.

However, even with this consideration, no one can see into the future and know where the markets will be tomorrow or the day after tomorrow. Therefore it is even more important that you can live with your investment decision and have made it yourself.

Where do I store securities?

A few decades ago, securities such as stocks were actually often physically stored in vaults. This has not been the case for a long time. Instead Shares, ETFs and other securities such as bonds are nowadays held in a custody account within the framework of so-called collective custody, i.e. the holdings are booked online . There they are considered special assets and are protected, for example, from the access of banks in the event of bankruptcy.

You do not necessarily have to visit a branch bank to open a securities account, but instead it is particularly suitable to open an online securities account with a direct bank or an online broker. There, all shares and other securities in the depot are booked, these previously bought.

Where do I buy and sell shares?

If you want to buy shares, you can do this in two slightly different ways, namely:

  • Stock exchange trading
  • Direct trading (OTC trading)

The trade of shares takes place worldwide at numerous stock exchanges. In Germany, for example, there are still a few stock exchanges, the so-called "direct trading" exchanges Stock exchanges . These are located, for example, in Frankfurt, Stuttgart, Berlin or Dusseldorf. There, the relevant stockbrokers are responsible for bringing together buy and sell orders and thus arranging trading.

Another variant is the so-called Direct trading . This is often also referred to as over-the-counter trading or OTC trading. In this case, your buy or sell order does not go through the stock exchange, but instead from your bank or broker directly to another bank or broker .

The two parties then try to combine the trading orders of at least two clients. For example, if you want to buy 10 telecom shares, the order will be executed in direct trading if the counterparty wants to sell at least 10 telecom shares and also the perhaps given limits match each other.

The choice of the appropriate trading venue often depends on the stock exchange on which the shares are traded. Beside the national stock exchanges there are numerous foreign stock exchanges, at which often also German shares or in this country foreign securities are traded. Direct trading is usually distinguished from stock exchange trading by the fact that the execution takes place faster.

What do I have to consider in terms of costs?

The stock trading is almost always associated with costs . You should be aware of these costs, especially in light of how often you buy stocks, ETFs or funds. In connection with buying and selling shares and the required securities account, the following costs in particular can arise:

  • Custody fees
  • Position fees
  • Order fees
  • Third-party costs (stock exchange trading)

A rule that is often applied is that you keep your transaction costs or order fees well below 1% of the order volume hold to trade economically.

In the case of funds, there may also be additional costs, in particular the Management fee as well as the administration costs . Also typical for actively managed funds is the front-end load, which does not exist for ETFs.

Advantages of passive investments like ETFs

An alternative to share trading are so-called passive investments, which are made by means of funds or ETFs . A big advantage is the Spreading risk through diversification . Both actively managed funds and ETFs invest investors’ money in a number of stocks.

For example, a DAX ETF contains exactly 30 different stocks, namely all those that are listed in the German stock index. A great advantage of passive investment is that you do not have to worry about the composition of your securities account yourself.

Instead, the components of the DAX index are purchased very cost-effectively by the ETF quite automatically and without a fund manager. You in turn buy only one share of the ETF and thus the corresponding share of the DAX.

On the market there are now over 1.000 ETFs that you can trade on the stock market. Especially recommended are index funds, which are called physically replicating . This means that the respective fund company actually has the corresponding shares in the depot and does not act by means of swaps or other derivatives, as is the case with synthetic ETFs. In addition, ETFs are recommended that come from well-known issuers and are therefore traded frequently.

Avoid beginner’s mistakes

In stock trading lurk some dangers, so that especially beginners often make mistakes. Among the typical beginner’s mistakes, which, however, you can easily avoid with the necessary knowledge:

  • Invest capital only in a share value
  • Lack of diversification
  • Speculative share or unknown secondary values choose
  • Investing too large capital sums
  • Trading from the gut
  • Do not use an investment strategy
  • Have exaggerated expectations

These mistakes can be avoided. This is how you should manage your If possible, always distribute capital among at least ten different stocks and thus take advantage of diversification. In addition, it is advisable, especially as a beginner, to initially invest in large and well-known stocks or broad ETFs.

What are the alternatives to shares as an investment??

There are, of course, a number of alternatives to stocks if you are looking for the right financial investment. Safe and interest-bearing investments we would like to leave out at the point, because for example with the daily money, with the time deposit or also with federal securities are the Yields simply much too low . Quite similar investment form as shares and thus possible alternatives are in particular:

  • Equity fund
  • ETFs

In addition, there are other types of investment, such as the Tangible assets fall and definitely also a possible alternative to shares can be. These are, for example, precious metals or real estate.

For advanced capital market participants options can still represent an admixture.


Buying shares offers investors a flexible opportunity to speculate in the short term as well as to invest in the long term. It requires only a few conditions to be met. This includes above all the possession of a securities account. In addition, you should be clear about your investment motives and goals before you buy shares and then sell them again. Furthermore, there are some alternatives, for example within the framework of a passive investment by means of ETFs.

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Frequently asked questions about buying shares and share trading

Buying shares may in principle any natural person and – with only a few restrictions – also legal entities . However, you must be of age, because otherwise the purchase of securities may only be made through your parents as legal representatives. Otherwise, in principle, any investor can buy shares who has a securities account and a certain amount of capital.

For several years now, profits generated from the purchase and sale of shares result, unlimited tax liability . It takes effect in this case the final withholding tax. The former speculation tax, according to which Profits from a holding period of at least one year were tax-free, no longer exists . You can, however, use your saver’s allowance and give the bank an exemption order. Then profits from stock trading are taxed only if the income exceeds the flat rate amount.

There are two types of profits that can be associated with a stock investment. On the one hand these are Price gains, so if your purchase price is lower than the later selling price on the corresponding stock. On the other hand, numerous stock corporations distribute a dividend from, which is also a form of income.

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