How to start investing in stocks in Germany?

What are we talking about?

In a previous article, I explained why you need to invest at all and how real estate investments differ from investments in stock. In this article I will tell you the basic principles of investing in stocks.

Is investing in stocks right for me?

The first rule to know about stocks is that you should invest in stocks for at least 15 years. You should invest money in stocks that you will not need in the next 15 years. This is due to the fact that in a short period of time, for example, in 3-5 years, shares can show a loss, but for long periods of time, the stock market, as a rule, always grows. By investing in stocks for just a few years, there is a high chance that you may lose some of the money invested, so consider stocks only as a long-term investment for at least 15 years.

What shares to buy?

The second rule that you need to know is that your portfolio should be as diversified as possible in order to reduce dependence on countries and industries of the economy. A portfolio is all the shares you have bought. A diversified portfolio means you own hundreds of different companies. As a rule, you should have at least 50 companies in your portfolio. And also these companies operate on different continents and in different industries.

Is it possible to buy shares of 50 companies if I save only 100 € per month for investments?

Yes, you can! To do this, there are investment funds that invest shareholders' money in hundreds or even thousands of companies. It is enough for you to buy one share of the fund to become a co-owner of thousands of companies from different countries and sectors of the economy. As a rule, funds specifically issue a lot of their shares so that they are cheap and you and I can afford to buy them. In the next article, I tell which fund is better for a beginner to invest in.


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