How are you doing in stock trading
Buy shares: 5 steps to your first share
The share prices have fallen sharply in recent weeks due to the Corona crisis. For many, a good time to get into stock trading. We'll show you the most important steps for your first share.
1. Select the right depot
A stock portfolio is the basis for stock trading. There is a large selection, but you can use these three criteria as a guide when making your decision:
- Do you have to pay a basic fee for the deposit?
- What are the order fees for buying your shares?
- Is it possible to set up savings plans?
We have already addressed these three questions in our article with three depot recommendations. Here we have come to the conclusion that you should take a closer look at the accounts of Trade Republic, Comdirect and Consorsbank.
Once you have decided on a depot, you can open it and get started in just a few minutes.
2. Define the investment objective
Before buying, you should decide on a strategy or an investment goal. The strategies are usually divided into two large sub-areas:
- At theInvest it is about long-term investments. This is where you often hear about “buy and hold”, ie buy and hold. You participate in the economy for the long term with shares and become a co-owner of your company.
- At the Trading it is about quick, highest possible profit through short-term purchases and sales of stocks. Trading is more for advanced investors, as you have high opportunities, but also high risks.
We are referring here to investing, i.e. participating in the economy over the long term.
3. Diversification means less risk
Depending on which investment goal you have decided on, you choose the right companies in which you want to invest. For example: Coca Cola and Apple.
One of the most important things to consider when trading stocks is diversification. This means that you don't put all your money on one card or one share. Think about different sectors and invest in several stocks from these sectors.
For example, you can choose technology, consumer goods and pharmaceuticals as sectors and invest in three stocks each. Your portfolio no longer consists of just one company from one sector, but rather nine companies from three sectors.
The wider you spread the word, the less bad it will hit you if a company gets into trouble.
4. Buy stocks
When you have decided on your personal investment strategy and have chosen different areas, you can buy your first share.
With these steps, the share purchase works using the example of a Trade Republic depot:
- You open your Trade Republic depot here.
- Then you log into your share portfolio via the app.
- You search for your desired share (e.g. Apple) in the app.
- After clicking on "Buy" you can choose how many shares you want to buy.
- If you confirm the order and buy the shares, you are a shareholder and therefore co-owner of Apple.
The purchase at Trade Republic always costs you one euro. With other custody accounts, this can be significantly more, you should keep that in mind when opening your custody account at your house bank, for example.
Open a free Trade Republic depot
5. Get through crises
You can currently see it: Due to the Corona crisis, many share prices have fallen sharply. Even if this is of course uncomfortable, it is not unusual. On average, there is an economic downturn every seven to ten years. But the past shows: This was followed again and again by a new, even better upswing.
The rule here is: persevere, do not sell in the first panic and trust that the companies that you have carefully chosen will survive this crisis. Of course, this works better with giant world market leaders (to stay with the example: Apple, Coca Cola or SAP) than with smaller, more speculative companies.
There are also many entry opportunities in the crisis. If you were to buy a new notebook on a special offer 30 percent cheaper, why not your dream stocks too?
Conclusion: Buying stocks is not just for professionals
Unfortunately, stocks have the image that they are only for professionals. However, this has not been the case for a long time. You too can deal with companies and, if they convince you, participate in them.
Every investment has risks, of course, but in the current phase of zero interest rates it makes no sense to just leave your money in the checking account.
Our depot recommendations
No investment recommendations. The stocks mentioned serve as examples only. This article contains affiliate links.
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