One of the most popular ways to invest your money for some time now is the Buying shares. By buying a share, you become a shareholder in a large company and can benefit from its success in the form of a return on investment. But which stock to buy? And how does one come into possession of a share?? Which securities account or broker is the best? The newcomer has to deal with these and other questions.
An investment in the stock market often seems sensible, as the average returns of large companies are many times higher than the interest rate that banks give out, if one decides for a savings account or a time deposit account. The disadvantage of speculating with shares is, however, that a partial loss of the invested money is also possible. If, for example, a company gets into a crisis, then the share price of the company falls and thus the own share is subsequently worth less money than it was at the time of the purchase of the shares under circumstances. If you made the decision to invest your money in stocks, then you should keep this risk in mind.
- Trading platform
- Open a deposit
- from 0€ order fees
- Social Trading
- Demo account
Your capital is at risk.
How to invest in shares?
Now there are several ways how to invest in shares. One can open classically with its bank a share account, whereby it is to be noted that the fees are here often very high. Investors are therefore increasingly opting for a so-called online broker or online securities account. This creates an access to stock trading for the investor and charges fees for it.
In addition, investors at most online brokers are often provided with useful information and analysis on the current stock market and may be given tips on buying stocks and a profitable investment strategy.
Which depots are recommended?
As with most Fillialbanken there are also with on-line depots partly clear differences. We have compared various providers and present in the following table, which platform is best suited for which investor type.
✅ high order volume
|✅ Long-term investors
✅ Medium order volume
|✅ All-in-one: bank, securities account, broker||✅ Professional traders||✅ ETF savings plans
✅ Share savings plans
|Order fees||no||from 3,80€||from 4,95€||from 5,80€||Savings plans from 0€
Shares from €4.90
|Custody account management-
|no||no||none||No||only in case of inactivity|
|Number of savings plans||none||350||416||none||535|
|To the broker||To the provider|
Your capital is at risk.
How the value of a share is calculated
Anyone who trades in shares knows that the share value of a company depends on many factors. Thus, current events, such as scandals or geopolitical changes, which could potentially harm the company’s profitability, can affect the stock price. Conversely, current stock market news that make the company’s profitability appear positive can cause the share price to soar.
Especially those who want to keep shares only for a short time and try to make profit with them, it is inevitable for them to follow the daily events. The one who prefers to invest his money in shares for the long term, for him the daily events are not necessarily decisive, because the share prices of very large companies are often very stable, If you look at them over longer periods of time. Therefore, just such companies (Too Big To Fail) are also interesting for savers.
For those who want higher returns, the topic of day trading is interesting. But be careful: With higher returns always comes a higher risk. In addition, in day trading – as the name implies – every day in addition to the money also some time must be invested.
If you are new to the stock market world, it is important to learn some terminology, discuss different trading strategies and know the pros and cons of different investment options. Successful trading with shares depends not least on how much knowledge one acquires, how much time one is willing to invest and which strategy is followed.
What are shares and what is a stock exchange?
For newcomers it may seem difficult at first to find their way through the thicket of new terms and contexts. First of all, he will ask himself what a share actually is exactly.
This security contains various Rights and obligations for its owner. Thus, the security holder becomes a shareholder of the joint stock company and has to pay the market value as consideration with the purchase of the share.
So companies issue shares so that they can dispose of liquid capital. The shareholder receives as consideration the partnership in a company. How many shares a company issues depends, among other factors, on how high the company’s share capital is.
However, this does not necessarily mean that the more valuable the listed company, the more a share costs.
For example, a Siemens AG security was trading at €99 at the end of 2018, while a Daimler share was already available for around €47.
However, Daimler now has a much higher share capital and as the larger company also makes more profit. The explanation for why a Siemens share nevertheless costs twice as much as a Daimler share lies in the fact that Daimler issued many more shares. Thus the proportion of the company per share is lower.
If you want to calculate the book value per share as additional information, you simply divide the equity of the company by the number of shares.
The value of a share
In the financial news, the stock market value of a company is always mentioned. This value allows conclusions to be drawn about when a how valuable the company is considered to be on the stock exchange. The stock market value is nothing other than the product of the number of shares and the current stock market price.
Who invests in shares, hopes that the stock exchange value of the corporation rises and that thus its own shares of this company become worth more. If this circumstance occurs one speaks of yield.
Many companies also give shareholders a direct share in annual profits. This payout will Dividend and represents a payment made to the shareholder per share. The amount of the dividend is usually proposed by the company’s board of directors and then decided by the general meeting of shareholders. So if you want to invest in shares, you should also find out whether dividends were paid out in previous years and how high they were.
Pricing of a share
Stock exchange in the 80s. At that time the market place feeling was still more present.
Shares are traded on the stock exchange. The stock exchange is nothing more than a large marketplace for securities, foreign exchange or commodities, such as gold. On the stock exchange, buyers and sellers find each other and transact their business through stockbrokers. These brokers receive commissions and are subject to various regulations. As with the farmer’s market around the corner, the laws of supply and demand apply here on the stock exchange. For example, if you want to buy a potato at a farmers’ market, it will be relatively cheap if there are a lot of stalls selling potatoes, but only a few customers looking for the potato.
If, however, a large number of visitors want to buy potatoes and only a few traders offer them, a higher price will be charged.
The same is true on the stock exchange.
For the investor this means that he tries to ensure before each share purchase that he has selected a company that will increase in value in the future.
It is not only the economic situation of a company that plays a role in whether the share price of a company rises or falls, but also the general mood on the stock exchange. To measure this, there are so-called share indices.
The most important stock index in the German-speaking world is the DAX. This measures the performance of the 30 largest companies on the German stock market and represents around 80% of the market capitalization of listed stock corporations in Germany.
It therefore summarizes the state of the economy in Germany and whether there is a trend towards a rapid increase in the share price (Bull market) or to the rapid drop of the real time rates (bear market) becomes noticeable. Other countries have equivalents, for example the Dow Jones in the USA or the Nikkei 225 in Japan. These stock indexes are interdependent and can allow conclusions to be drawn about the profitability of the respective countries.
Risks involved in share trading
Newcomers in particular should therefore not invest too large amounts in their first steps. If, over time, they succeed in acquiring a know-how and first knowledge of the peculiarities of the stock exchange and the market, then nothing stands in the way of the second step, speculating with larger amounts.
Saving with shares
Savers should also look into the possibility of stock trading. The returns on shares of large stable companies are usually far above the interest rate of fixed money in the account of the domestic bank and can thus be seen under certain circumstances as a more attractive investment option. If, in addition, the costs are reduced by doing business with an online broker, there is a possibility that at the end of the longer savings period significantly more money will remain in the account.
Buy shares by country of origin
Which shares to buy? This question is asked by the stock novice, as well as the experienced stock market professional. Listed companies there are many. Newcomers in particular can quickly lose track of the large number of options available. To make the start a little easier, we present here some important stocks for beginners, as well as for experienced people.
Buy Daimler shares
German automotive company Daimler was founded in 1924 and is mainly known for its Mercedes-Benz. Today, other automobile brands such as Smart or Western Star are also under the control of the company.
Buy Deutsche Bank shares
Deutsche Bank AG is the largest bank in Germany. The head office is in Frankfurt. Deutsche Bank maintains branches worldwide and sees itself as a universal bank.
Buy Porsche shares
Porsche AG has its headquarters in Stuttgart-Zuffenhausen and is owned by the VW Group. Founded in 1931 by Ferdinand Porsche, sports cars and SUVs have been produced since 1945.
Buy Siemens shares
Siemens was founded in 1847 and is now active in many divisions. This is how the company produces in the areas of industry, energy, health and infrastructure.
Buy Software AG shares
Software AG is headquartered in Darmstadt and offers software solutions for companies as well as consulting services in the area of IT infrastructure and business processes.
Buy VW shares
Volkswagen was founded in 1937. The public limited company VW AG is represented today with many well-known brands on the automotive market. In addition to VW, this includes Audi, Bentley, Bugatti, Lamborghini, MAN, Porsche, Scania, SEAT and Skoda.
Buy BP shares
The BP p.l.c, which emerged from British Petroleum, is headquartered in London and manufactures, refines and trades petroleum products. BP was founded in 1924 and employs over 80 people.000 people.
Buy Gazprom shares
PAO Gazprom is the largest natural gas production company in the world, employing nearly half a million people. With 110 billion US dollars market capitalization Gazprom is one of the largest companies in Europe.
buy amazon shares
Amazon.com, Inc. is, according to its own statements, the world market leader in online mail order business. With a market capitalization of approx. 750.000 US dollars, it is the second most valuable company in the USA after Apple.
Buy Google shares
Google LLC is part of the parent company Alphabet Inc. The group was founded in 1998 and is headquartered in Mountain View, California. Google earns its money with Internet services and advertising.
Buy Tesla shares
Founded in 2003 by Martin Eberhardt, today Elon Musk is the face of Tesla, Inc. Tesla is a pioneer company in the field of electric mobility and sustainable energy.
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