Get online access to the stock market with a Libertex Invest account and buy shares commission-free. Build your own investment portfolio with Libertex! Market spreads apply
Get online access to the stock market with a Libertex Invest account and buy shares commission-free. Market spreads apply build your own investment portfolio with Libertex!
Benefits of Libertex Invest
Own real stocks – Get shares of the world’s well known companies.
Pay zero commissions – Pay literally 0% commission for any investment (market
spreads apply).
Opportunity to earn dividends – You may build a sustainable dividend payout
portfolio with Libertex Invest account.
Buy stocks on your mobile device.
Buy stocks with 0% commissions (market spreads apply) OPEN ACCOUNT
The value of investment in stocks and shares can fall as well as rise, so you
may get back less than you invested. Past performance is no guarantee of future
results.
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Why buy shares?
The question “Why buy shares?” is quickly answered: Investing in shares and other securities is a way of diversifying your portfolio for the long term. In times of low interest rates, shares offer what savings accounts, for example, have long since ceased to offer: possibilities for Yield.
But what should I pay attention to as an investor when investing in shares? How important is the stock market price when entering and exiting the stock market? These questions are asked by everyone who has a little money on the side and wants more than the measly interest on the current account.
Most of the investors follow a common rule: they never put all their eggs in one basket when buying shares and spread their risk over several securities from different sectors. In addition, they only buy shares in carefully selected companies with a convincing business model and promising future prospects.
How do I buy shares?
Investors can usually place the order to buy shares in person via an advisor at their bank or by telephone, e-mail or fax. With online brokers or direct banks, you can easily place the securities order online. All you need is the securities identification number (WKN or ISIN) of the share certificate you wish to buy.
The remaining steps are usually self-explanatory. Before you can start investing in shares, however, you need an Invest account.
Define your investment goal – even before buying shares The value of an investment in stocks and shares can fall as well as rise, so you may get back less than you invested. Past performance is no guarantee of future results.
How much money do you have available for stocks investments?
It is generally recommended to only invest capital in the stock market that you do not need in the short term. If the markets run in the wrong direction, you will not have to sell at a loss because a costly car repair may be due. Securities investing on credit is taboo, especially for beginners, and better suitable for investors with many years of experience.
What risk are you willing to take?
Determine what risk you are willing to take. Anyone who trades unerlying assets and invests in shares must also expect temporary price declines. Share prices often fluctuate strongly, so that within a few weeks or months 10,000 euros can become not only 12,000 euros but also 8,000 euros or less.
What return do you expect from your investments?
Determine what return you would like to achieve with your stock market investments in time period X. With shares it is important to focus on long-term, not short-term returns Remember: Most of the time, investors fail on the stock market because they want too much too fast and buy too risky shares, for
example.
Which shares to buy?
Putting together a shares portfolio Once you have answered the above questions, you can turn your attention to the basic composition of your stocks portfolio – and the question: Which stocks to buy?
Which stocks investors should buy depends largely on their risk tolerance. When buying shares, you may opt for growth shares, value shares or a mixture of the two.
Experienced investors therefore do not put all their eggs in one basket when investing in stocks. Instead, they may buy shares in several companies from different sectors and different regions/countries. In this way, losses on individual shares can be offset with gains from other securities investments.
Investments in companies that are active in growth markets (so-called “growth stocks”) can be extremely lucrative, as these companies often strongly increase their profits. This usually also has a positive effect on the share price. On the other hand, investing in growth stocks is also riskier than investing in “value stocks”, i.e. well-known companies that operate in established markets and have been market leaders there for years. Value shares often do not offer as many possibilities , but they also carry a lower risk of loss. Value stocks also often offer higher dividend payments than growth stocks. Dividends have a positive effect on the return of your equity investment. Remember about the risks as well.
Avoid the biggest investors mistake in stocks trading Many investos make the same mistake when investing in stocks. They invest their money in just one security, usually a rather speculative stock. This can go well, but in most cases it goes wrong. Avoid such a single value risk and the danger of sitting on double-digit losses at the very next downward movement or negative company news. Never put all your eggs in one basket on the stock market! Instead, spread your risk by spreading your investment over several promising stocks.
Buying shares – inform yourself in detail beforehand Bear in mind that as a buyer of a share you will always meet a seller who is of the opinion that it is better not to own the security. As a seller, it is the other way round. So always question your opinion from this point of view before buying securities. If you want to increase your assets with stocks in the long term, you should therefore choose your investments carefully and always keep yourself informed about your shares before and also after you placed the market order.
Before buying a share, inform yourself comprehensively about the investment and follow the example of the most successful investors of all times, such as Warren Buffet, George Soros, Benjamin Graham or Peter Lynch. They only invest in securities of companies whose business they fully understand.
Let profits run, limit losses
While traders tend to aim for quick returns, investors are keen to invest in successful companies for the long term and to participate in their success by buying shares – for example, in promising sectors such as water treatment with water shares. Nevertheless, even with long-term investments it is advisable to question them if success fails to materialise or the share is heading in the wrong direction.
Experienced stock exchange traders act according to the old stock exchange motto “let profits run and limit losses”. However, many investors are thwarted by psychology. They often realise their profit even after small price increases. When prices fall, on the other hand, they do not sell and hope to see their
purchase price again at some point. Not infrequently, high losses then accumulate.
When to buy shares?
Finally, we turn to one of the most important investor questions: When is the best time to buy and sell shares? Many investors who want to build up their portfolio through stock market ask themselves the question of the right time to enter and exit the market. The somewhat sobering answer to this is: the
perfect moment to enter the market or exit a stock market commitment cannot be predicted. Despite all the possibilities, investors only hit the right moment with a lot of luck. The fact is: If you wait for the right moment, you have already missed it. The following methods can help to at least get closer to the
perfect entry point. Various economic indicators may give forecast for future price developments.
These include, for example, various performance reports on the economic situation of a country (GDP figures, etc.), the inflation rate, the oil price trend and the ECB interest rate trend. The most important methods for finding the best time to buy shares are technical analysis and fundamental analysis.
Technical analysis examines the past price development of a share or an index for conspicuous price formations – depending on the chosen strategy or method, other patterns/signals are important. As a rule, technical analysis analyses charts, which is why it is also called “chart analysis” or “chart technique”.
Fundamental analysis, on the other hand, takes a close look at various fundamental data of shares and companies. The aim is to find out whether it currently makes sense to buy or sell shares. The price-earnings ratio (P/E ratio) of a share, for example, is a particularly popular fundamental indicator. The P/E ratio helps to track down favourable share certificates.
The value of an investment in stocks and shares can fall as well as rise, so you may get back less than you invested. Past performance is no guarantee of future results.
Buy stocks with 0% commissions (market spreads apply)
Get online access to the stock market with a Libertex Invest account and buy shares commission-free (market spreads apply). Build your own investment portfolio with Libertex!