Buying Stocks Online Guide: How To Buy Stocks? Cheap share purchase 2022

John James
October 13, 2021
Many people wonder where to buy stocks, but buying stocks online is easier than ever in the digital age. Access to the stock market can be established very easily via online providers. If you want to buy shares, you can contact your bank, savings bank or direct banks on the Internet with this request.
Buying Stocks Online Guide: How To Buy Stocks? Cheap share purchase 2021

Would you like to buy shares but don’t know where and how to start? This page contains all the tips, the best providers, depots and brokers at the ready.

There are also specific recommendations on the most promising stocks in 2021. Finally, we explain buying stocks online for beginners and professionals!

Table of Contents

Overview: What to look for when buying stocks online
  • Strategy: trading or long term? : Before you start buying, you should be clear about your plan. For example, do I want to act actively and invest time every day? Or am I oriented towards the longer term and would like to use shares for retirement provision?
  • Which stocks to buy: The strategy is used to select stocks, sectors and countries.
  • Risk tolerance: Here, you should ask yourself whether you are willing to sit out short-term losses. One of the biggest mistakes in investing in stocks is panic selling when things are not going well. Anyone who has problems here should rely on solid stocks or even diversified funds or ETFs. However, a lower risk always means a lower return.
  • Beware of fees: Many investors often underestimate the fees when trading stocks. Especially with smaller investment amounts, these can quickly eat up the return. We, therefore, recommend a cheap broker such as ETFinance, which currently charges 0% fees on shares (as of Sep 2021)
  • Learn from professionals : On the stock exchange, knowledge and an information advantage is cash. So you should keep training yourself and learn from the strategies of successful investors.

What are stocks, and how do stocks work? Definition & Brief Explanation

Companies listed on the stock exchange issue shares in their company (shares) and receive new funds in return from the share buyers. This is how a stock corporation has the option of increasing its liquidity by selling shares.

The stake in the company a buyer receives by purchasing a share depends on how many shares the company in question has issued to him/her. This can vary widely.

Anyone who purchases shares in a company has the opportunity to gain several benefits. In the best-case scenario, he can benefit from rising share prices, which increase his return via the shares and participate in dividend distributions, for example.

However, not all stocks have a dividend, and the amount can vary widely from company to company. It also happens that dividend payments are cut or cancelled entirely in an economic crisis. On the other hand, economically successful companies often reward their shareholders with increasing dividends.

In addition to these advantages, a share buyer can also participate in a company’s general meeting, informed about the business strategy and prospects. However, the right of participation of private investors is usually minimal.

Due to the high number of shares issued, a shareholder from the private sector often only holds a minimal stake in the company. In addition, not every share guarantees voting rights to buyers. The situation is different with institutional investors, who often secure a say in the company through the shares.

A more detailed explanation of what stocks are precise, why they were invented, and the different types of stocks follows later in the article.

Buying Stocks Online Guide: How To Buy Stocks? Cheap share purchase 2021

Where do you buy stocks? Where can you buy stocks cheaply?

Many people wonder where to buy stocks, but buying stocks online is easier than ever in the digital age. Access to the stock market can be established very easily via online providers. If you want to buy shares, you can contact your bank, savings bank or direct banks on the Internet with this request.

Online brokers often offer new customers desirable conditions for opening a so-called custody account. Here you can buy stocks remarkably cheaply. Our test winner here is ETFinance, an online broker where you don’t have to pay any fees when trading stocks & ETFs.

On the Internet, beginners can find out more about the fees for the custody account and for processing an order (share purchase) and compare costs with each other.

Regardless of which way the investor decides, he always needs a deposit. The shares/securities are managed in this depot. To carry out a purchase of shares, the beginner can turn to his bank advisor.

He can tell him which shares he wants to buy, what number of shares and how much he wants to spend in total. The bank advisor also informs the investor of the fees incurred for buying shares or for managing the securities account. Anyone who has found out something can, of course, also buy shares themselves.

We recommend our test winner Depot ETFinance, as this allows you to buy shares free of charge.

The Best Online Stock Brokers 2021 Compared: Where Are The Best Places To Buy Stocks?

Rating

Min. Deposit

Min. Spread

Assets

Views

Positive Reviews

Negative Reviews

Likes

4.9/5
250
0.07
  • Commodities
  • Forex 40 +
  • Metals
  • Stocks
  • Indices
  • Cryptocurrencies
85
2
4.5/5
250
0.07
  • Metals
  • Forex
  • Indices
  • Cryptocurrencies
  • Commodities
  • Stocks

 

254
82
3
58
4.9/5
250
0.07
  • Forex 40+
  • Metals
  • Commodities
  • Stocks
  • Indices
  • Cryptocurrencies

 

480
80
3
50
How best to buying stocks online? Our guide to purchasing stocks in South Africa for beginners in 5 steps

Buying stocks for beginners is easy: the following steps are the fastest way to get your first stock investment. This is not complicated, but traders should be careful. After all, the right choice of broker can be decisive for the subsequent investment success!

Buying shares at Sparkasse was yesterday. Today modern online brokers deliver better and cheaper options.

Step 1: Broker selection

Choosing the right provider is the first essential step if you want to invest your money in stocks. Several criteria determine which provider is best for beginners.

On the one hand, you should look at which trading tools and which user interface is best suited for your requirements. Then, of course, the fees play a role, which is often related to the deposit amount you want to make.

We choose our test winner broker, ETFinance, because it offers the best conditions: With ETFinance, you can trade shares free of charge. In addition, ETFinance is fully regulated and licensed.

Step 2: Registration with the desired provider

Most trading platforms where stocks for beginners can be bought require an email address, name and other vital information to open an account.

As a rule, this registration is done within a few minutes on all platforms presented here. With ETFinance, for example, you have to enter a correct email address and a mobile phone number to verify the account.

Step 3: verification

There are different verification processes in the market. In the vast majority of cases, you have to verify the account with an ID. However, this procedure is usually quite simple and can be done in a short time. A copy of the identity card, driver’s license or passport will be sent or uploaded for this purpose. In some cases, it is also possible to do this directly via webcam, saving some time.

The procedures for confirming the identity can take anywhere from a few minutes to several days. As a rule, it should work relatively quickly, but you have to expect to have to wait a little longer from time to time.

Step 4: deposit money

As a fourth step, of course, you have to deposit an amount that you want to use for trading. Buying stocks has never been so easy, but at this point, you have to be clear about how much money you want to spend on buying stocks. No matter how conservative you wish to trade, there is always a risk of losing the capital invested. So, in general, you should only invest as much money as you are willing to lose if the worst comes to the worst.

Once you’ve decided on a sum to start trading with, you have to decide on a payment method. With the platforms presented here, you always have several options – a bank transfer can be used as well as a credit card payment. Some providers like ETFinance even offer the deposit of money via PayPal.

When choosing the payment method, one should always keep the fees in mind. Because even with the deposit, there are usually fees. Of course, it takes some time for the amount paid in to be traded.

This usually takes the longest with bank transfers, while payment by credit card is usually the fastest and enables stocks to be traded within a few minutes. If you are in a hurry, you should carefully check which provider and which payment method will get you there the fastest.

Here is an overview of all payment methods that are available at ETFinance:

Payment optionPossible?
Buy stocks with a credit card✔️
Buy stocks with PayPal✔️
Buy stocks with Skrill✔️
Buy stocks with bank transfer✔️
Buy stocks with Neteller✔️
Buy stocks with UnionPay✔️

Step 5: The Stock Investment – Buying stocks online

When the amount paid in has arrived in the account, trading can begin. When it comes to trading stocks, sooner or later, a decision will be made as to which of the many available stocks to trade. But which stocks to buy? What is widespread? And how can you limit losses to build up a fortune in the long term?

When trading, the most important thing is choosing the right strategy and implementing it. The good thing: this page provides further information on investment strategies. Just read on. The form of the trade must, of course, also be selected before an order is placed and the actual trading begins.

By the way: If you don’t want to read the text but want to follow the process step by step, there is a video guide for you:

etfinance

How do stocks work? Detailed explanation:

In short, stocks are equity investments in companies. A share is a financial instrument that certifies a stake in the share capital of a stock corporation (AG) for the buyer. The shareholder is guaranteed property rights and a say in the matter.

Shares are therefore securities that represent a documented right to a stock corporation. The owner of a share is called a shareholder. A shareholder is a co-owner of the company or owner of the company’s share capital.

Example:

If an AG has issued a thousand shares, one share then represents one-thousandth of the AG. Thus, if a shareholder owns 100 shares in this stock corporation, he owns 10% of the AG.

Acquire company shares with shares

With the acquisition of a share, one receives company shares. In other words, if the share price rises steadily, it means that the company is doing well. As a shareholder, you can therefore assume that you will receive a high dividend. This is a share in the company’s profits, which is determined by a company itself and can vary from year to year. The dividend is set at the annual general meeting.

Shareholder Rights

As a shareholder, you have no direct influence on the business of a company. However, when you buy a share, you get the following rights:

  • Right to the dividend (profit distribution)
  • Right to a share in the company’s share capital
  • Right to liquidation proceeds in the event of bankruptcy
  • Right to attend the annual general meeting

Important topics are discussed at the Annual General Meeting, although it should be noted that not every shareholder is entitled to vote. However, if you own the majority of shares ( 50 + 1 ), you are considered the majority shareholder and can outvote all others and even decide on the composition of the board of directors.

Buying Stocks Online Guide: How To Buy Stocks? Cheap share purchase 2021

Different types of stocks

However, not all shares are the same. In addition to existing shares, there are also new issues and IPOs. These stocks hit the market when a private company chooses to go public. Often the IPOs are announced months in advance. These IPOs can then be subscribed to at your bank to acquire the shares on the day of the IPO.

In the case of existing shares, a distinction is made between the following shares:

Common stock

Holders of the common shares (“tribes”) are the only ones who have a voting right in the general meeting, which depends on the size of the participation.

When the typical “shares” are spoken of, they usually refer to ordinary shares. The common shares include all shareholder rights.

Preference shares

The opposite of the common stock is the preferred stock. Unlike holders of ordinary shares, holders of preference shares (“Preferences”) do not have voting rights. However, these shareholders are often entitled to a higher dividend.

For private investors, it is usually not a disadvantage if you do not have voting rights. Shareholders with preferred shares often only have a small stake in a company, which means they have no influence anyway.

As compensation or even preference, you then get a higher profit distribution.

Bearer shares

The bearer share is the most common form of share.

The bearer shares of the owners are not mainly known. Only the possession shall prevail.

This type of stock is also traded on the stock exchange.

The names of the shareholders, so the corporation is not always at all times known.

You can easily sell these shares to friends, acquaintances, etc., without notifying the stock corporation.

Registered shares

Registered shares are relatively rare compared to bearer shares. These shares are issued to a specific person, and only the named holder may exercise all rights associated with possession of the deed.

These shares are usually traded in a small and exclusive group.

In addition, this form of share is nowhere near as common as it was 100 years ago. Due to digitisation, these stocks are very, very rare.

Par value shares

In the case of nominal value shares, the share capital of the shares is divided according to the nominal value of the shares.

Often this nominal value is only 1 EUR so that a correspondingly large number of shares are issued.

For par value shares, the amount per share is fixed and issued.

Unit value shares

No-par shares have no specific nominal value.

In these shares, only the number of AG shares is specified in the Articles of Association. Therefore, the “nominal value” is implicitly divided from the share capital by the number of shares.

Young stocks

New shares are all those shares that are offered to shareholders in the event of a capital increase. So if a company needs more money, it can do a capital increase. Then more shares are issued to make more money.

Old stocks

In contrast to new shares, old shares are all those shares that were already available before a capital increase. In addition, the owners of old shares receive subscription rights as compensation, which can be used either to buy new shares or to buy shares on the stock exchange.

How do you make money with stocks?

In principle, the following applies: Always get the best information beforehand and acquire the most necessary knowledge before deciding to buy a share because a share is by no means a savings account.

If you only want to save money, you should fall back on a savings account – this is usually safe.

However, for this security, you always pay with low interest and, even though depreciation in the case of inflation. However, the money stays with you.

In recent years, however, stocks have repeatedly proven to be high even though depreciation is profitable, even if, of course, there is a particular risk involved. That is why it is investments that should be chosen wisely.

However, buying a stock can make profits through dividends and price growth.

Gains through price growth

Shareholders can make a profit through price gains with shares. Since stocks are traded on the stock exchange, they also have a price based on the buyer’s demand and the seller’s offer.

If there is high demand because many people assume that the company is worth more than its current market value, the share price also rises.

example

When you own a share in Tesla, you win primarily through profit through price growth.

The share price soared, and earnings per share for the last quarter were $ 2.14. The stock gained more than 7 percent and also climbed to $ 623.

Profit from dividends

First of all, you earn money from the dividend, i.e. the profit distribution. Preferred stocks are of particular interest here, as they result in higher profit distribution. The dividend is decided annually at the annual general meeting.

example

McDonald’s recently announced that it would again distribute a dividend of USD 1.25 per share. Calculated over the wholeper cent year, $ 5.00 will be paid out. At the current share price of $ 198.62, the current dividend yield is 2.52 per cent (as of July 22, 2020). McDonald’s has increased its payout every year since it started paying dividends in 1976. The share has been listed on the stock exchange since 1965.

Trading stocks – day trading stocks explained

Not so long ago, only large and institutional investors were able to trade in the markets actively. However, thanks to improved technologies, the Internet and the opportunities it creates, it is now basically possible for every investor to trade in securities actively.

Day trading is a special form of active trading. But what exactly is day trading? Basically, day trading describes how an investor buys and sells security within a day.

  • In other words: In day trading, investors hold a position for less than a day.

The day traders pursue a strategy that relies on short-term price changes and usually moves in highly liquid markets to guarantee that the respective orders can also be executed.

Day traders often pay attention to short-term news, such as breaking news or the publication of company reports, in order to benefit from short-term price developments.

Every day trader pursues their own strategy different strategy to benefit from short-term price developments and generate returns. However, the strategies of day traders can be roughly divided into four broad categories:

  1. Scalping: In the scalping strategy, traders make several small profits on short-term price developments in one or more securities.
  2. Range trading: With this strategy, the traders work with support and resistance levels to make decisions and find good entry and exit points.
  3. News-based trading: With this strategy, traders watch out for news and try to take advantage of price fluctuations during this time. It is essential to get the news before anyone else and have a good trading desk available.
  4. High-frequency trading: Also called HFT, complex algorithms are used to benefit from short price fluctuations automatically.

There are numerous strategies and approaches within these categories. What all strategies have in common, however, is that the quality and timeliness of the information play a vital role and that every day trader has to find his strategy with which he can generate profits.

Day trading offers investors great opportunities. However, in order to become a successful day trader, above all, you have to deal regularly and intensively with the stock markets and continuously refine your strategy.

As a beginner in day trading, you should start with small amounts and work continuously on your strategy. Exchanging ideas with other traders about their strategy or learning from experienced traders are also an excellent opportunity to further educate yourself in this area and ultimately to be able to make a profit.

Buying Stocks Online Guide: How To Buy Stocks? Cheap share purchase 2021

What does a share cost?

What a share cost depends on the company’s share price. The offers for buying and selling shares are brought together on the stock exchanges. The higher the demand for a share, the more the price rises.

If, on the other hand, interest decreases and offers to sell outweigh, the price of the shares falls. Buying and selling investors more likely depend on many factors.

Many stocks usually benefit from rising prices in a so-called bull market, i.e. a market with rapidly increasing demand. This is often the case when the overall economic development and the economic outlook are good.

However, individual stocks can also benefit from the economic success of respective companies. Successful management can boost the share price. Companies active in a growth sector or can score points with innovation often benefit from rising prices.

On the other hand, if there is a bear market, the shares on the stock exchange that record price losses predominate. The background can be a general economic slowdown or a specific event that triggers the price declines, such as the most recent corona crisis.

The securities/shares of individual companies can also suffer from the fact that competition in the industry is challenging, the demand for a particular product falls, or mismanagement occurs in the company.

How do I make money from stocks?

The easiest way to make money on a stock is to buy it at a low price.

Then you try to keep the share as profitable as possible to benefit from rising prices.

Finally, you look for a suitable time to then sell the shares again at the increased price.

An example: A newcomer buys ten shares in a car manufacturer at a unit price of 20 euros. So he invests 200 euros plus applicable fees. Within two years, the share will rise to a unit price of 30 euros. So the value per share has increased by 50 per cent. If the investor decides to sell the share now, he will make a profit of 10 euros per share or a total of 100 euros fewer fees.

Buy Low, Sell High!

It is essential to buy at the lowest possible price to make money with stocks and sell at the highest possible price. However, it is only possible to predict how the prices on the market will develop to a limited extent.

Shares often record steady gains over the years until a sudden event that severely impacts prices, such as the most recent Corona crisis or the financial crisis in 2008. In general, however, indications for price development can be derived from various indicators.

These can be, for example, economic assessments based on surveys or technical indicators based on price analyses.

How much money the investor makes also depends on how long they hold their stocks before reselling them. While short-term investors try to get as high a return as possible in as little time as possible, long-term investors see stocks as a permanent investment, the return of which grows over years or decades.

In addition to rising prices, money can also be earned from the stock mentioned above dividend.

An example: If a company pays out a return of 5 per cent, which corresponds to an amount of 10 euros per share based on the share value, an investor with 10 shares in this company will receive 100 euros in one year. And he doesn’t have to sell his shares for that.

Accordingly, he can expect a dividend payment again next year. However, as mentioned earlier, not all public companies pay dividends, and the amount can change every year. However, some investors are specifically looking for the best dividend stocks when investing.

Which stocks should I buy cheaply now? Current share buy recommendations in South Africa:

shareCourse (10/20)salesSales/shareMarket capitalisation in millions
ADIDAS€ 256.6049.8 million194.06550,123.40 EUR
ALLIANCE€ 150.42112.1 million746.683EUR 62,533.80
BASF€ 47.0685.8 million1.8 million43,118.00 EUR
BAYER€ 40.28119.5 million3.0 million39,989.60 EUR
BEIERSDORF€ 89.1622.4 million251.033EUR 21,230.30
BMW ST€ 58.4037.8 million648.212EUR 37,093.66
CONTINENTAL€ 91.1220.0 million220.93318,172.50 EUR
COVESTRO AG ON€ 40.6911.6 million284.4217,757.34 EUR
DAIMLER€ 44.6283.6 million1.9 millionEUR 47,335.10
DELIVERY HERO SE NA ON€ 98.0639.3 million401.19819,382.30 EUR
DT. BANK€ 7.8955.1 million7.0 millionEUR 16,018.20
DT. STOCK EXCHANGE€ 127.0053.4 million420,871EUR 23,836.60
DT. POST€ 38.2353.6 million1.4 millionEUR 47,245.40
DT. TELECOM€ 13.0466.7 million5.1 millionEUR 60,780.70
DT. RESIDE€ 43.1921.0 million487,67714,481.60 EUR
E.ON€ 8.9144.2 million5.0 million23,362.00 EUR
FMC€ 65.9223.7 million357,338EUR 17,861.20
FRESENIUS€ 31.8827.3 million860.34219,935.70 EUR
HEID. CEMENT€ 49.2118.2 million372.8609,617.22 EUR
Henkel VZ€ 82.9819.7 million236.25434,763.00 EUR
INFINEON€ 24.0554.6 million2.3 millionEUR 30,812.90
LINDE PLC EO 0.001€ 187.8086.6 million464.101EUR 97,573.42
MERCK€ 128.6534.2 million262.717EUR 58,586.30
MTU AERO€ 146.0523.5 million161,7547,998.60 EUR
MUNCH. BACK€ 201.3038.6 million191,533EUR 28,012.80
RWE ST€ 31.8642.7 million1.3 millionEUR 21,645.80
SAP€ 91.70306.5 million3.3 million108,806.00 EUR
SIEMENS€ 100.7882.5 million821.360EUR 81,358.10
VOLKSWAGEN VZ€ 126.0280.5 million638.278EUR 64,974.03
VONOVIA€ 54.9237.0 million675.969EUR 30,671.10

The question of which stock is the best is not that easy to answer. When buying stocks, there are no guarantees that prices will rise. However, various criteria can be used to identify worthwhile stocks.

Newcomers should take a look at which stocks have been rising in price over many years. Small price drops are negligible if these stocks have recorded a steady increase in value over the overall development.

For example, many technology stocks, such as Apple and Microsoft, have shown steady bottom-line growth in recent years. However, some stocks have only recently risen sharply.

This could be, for example, the papers of companies that are only recently traded on the stock exchange. Or the share of a company that recently scored with an innovative product or other management success. Up-and-coming companies such as Sixt or Etsy are also worth a look.

Those who invest for the long term and are more safety-oriented should avoid stocks with high volatility ( price fluctuations ), even if they promised a significant development in the short term.

At best, such stocks should only be a small addition to the portfolio. However, if you want a stable return, you should buy stocks that have risen steadily over long periods.

Dividends: The bonus for the shareholder

Of course, the dividend can also be a criterion when choosing a stock. So-called value stocks, i.e. companies that are already operating successfully in the market and do not hope for great success in the future, pay dividends more often. For investors, dividends can be a stable source of income regardless of price gains.

Caution is advised to only bet on risky stocks. This is because the price increases mainly based on great promises for the future. This is often the case with start-ups that have just been listed on the stock exchange.

The value of these shares is not measured by a real company value but only by investors’ ideas of what this company could be worth in the future. So just as quickly as it goes up, it can go down again if hopes are not fulfilled.

Newcomers to the stock market, in particular, should be very cautious here. Anyone who thinks they can get rich quickly with shares should be aware that they can also get poor quickly. At least if he does not diversify his risk broadly enough and is only looking for quick and high returns.

Of course, the hope of a tremendous economic future also plays a role in the share price of value stocks. But these companies are already in the black as a rule and have made profits for years. Such companies often get through a crisis and an intermittent price slump better than the growth stocks.

So-called analysts also assess the performance of a share. For example, you look at the development of the company and the economic objectives and achievement. Based on your assessment, you can then provide price forecasts and buy or sell recommendations for stocks.

What stock metrics should I know?

Professional investors like Warren Buffet base their decision to buy shares less on hopes for the future and more on the challenging economic share ratios of the companies. There are several metrics that investors can consider when making a purchase.

You should never rely on just one key figure. Only a sum of critical figures becomes more informative about the chances of buying shares.

1. The KGV

One key figure is the price-earnings ratio (P / E) . This is because the share price and profit or dividend are taken into account. An example: If the share price is 40 euros and the dividend paid is 4 euros, this results in a P / E ratio of 10 using the share price/dividend formula.

The result is now carried over to the number of years it takes to finance the purchase of a share in the company. In that case, it would take ten years for the distributed earnings to pay the price per share. A lower P / E ratio is therefore considered to be a better value.

2. The EKQ

The equity ratio (EKQ) is another prevalent indicator. Equity means the capital that the owners/shareholders make available to the company themselves. So it is money that is intended directly for the company and not money that is distributed.

The equity capital does not explicitly mean third-party money that the company receives from investors and banks. However, information about debt capital is needed to calculate the total capital of a company. It is the sum of equity and debt.

The formula for the equity ratio is: (equity / total capital) x 100. The higher the equity ratio, the more solidly the company is and is better protected against insolvency in a crisis.

A high proportion of debt in total capital, on the other hand, warns investors to be cautious. Should the donors of the outside capital turn off the money tap in a crisis, this can endanger the existence of such companies.

3. The KBV

Another important figure for buyers of shares is the price-to-book value ratio (P / B) . The book value is nothing more than its equity, which says something about its financial stability. The formula KBV = price of the share/book value is used to calculate the P / B.

Suppose the price of the shares is higher concerning the book value of the share, the P / B increases. A high P / B may be since the share price is high primarily due to the hopes and prospects of investors.

A low P / B below 1.0 suggests that the company could be acquired by buying shares less than its equity.

What do I do after buying stocks?

Anyone who has bought shares shouldn’t just sit back and wait. However, even those who want to hold their shares for the long term should not lose sight of them. There is a risk that certain events will cause the shares to lose value and a loss for the investor.

So anyone who buys stocks should be aware that that is far from being the end of it. It is essential to regularly look at your shares’ price and check your portfolio composition at regular intervals.

In this regard, stocks differ from other investment forms, such as government bonds or real estate. Moreover, due to daily trading on the stock exchange, the constantly changing economic environment and the changing supply-demand situation, share prices are continually rising or falling.

Often these are only minor changes in course, but sometimes they can be severe. Moreover, especially in times of crisis, volatility increases sharply. Investors should therefore obtain various sources of information to always stay up to date.

These can be stock tickers and price charts on the Internet, apps for smartphones or tablets or newspapers and magazines that deal specifically with stock market events.

Always stay on the ball!

Anyone who knows how the companies they have acquired shares are doing economically and what plans there are for the future can respond much better. Not with every bad news or every small price slide, a sale of the shares is the order of the day.

If you invest for the long term, I shouldn’t be alarmed by something like this. But if the outlook for the stock deteriorates in the long run, a review and a possible sale are in order.

Conversely, a well-informed investor knows when it can be worthwhile to increase the number of shares or add another security to the portfolio. Investor legend Warren Buffet once said that anyone could become a successful investor if they only spend enough time reading annual reports. There may be something to it.

Even so, newcomers to stocks shouldn’t feel scared. Even those who cannot or do not want to spend a lot of time managing their share portfolio can succeed with shares.

The following rule applies: the more cautious an investor is when buying, and the less they bet on risky stocks, the less time they will need later for their stocks because these stocks will generally have far less price fluctuations than the stocks of start-ups on the market.

Choosing the right online broker: what should you pay attention to?

So, where should you open a custody account to buy stocks? Where can you buy stocks? These questions are generally in the room and form a certain inhibition threshold for most new traders. However, the test of the best stock portfolios and brokers should reveal it and make a start in stock trading as easy as possible.

In the following, you will find relevant information about the providers, their respective advantages and disadvantages and other trading alternatives. There are also detailed instructions on how to register, deposit and withdraw. Thus, even beginners learn quickly how to invest properly in stocks.

There are several ways to buy stocks: through your house bank (usually slow and expensive) or buying stocks online (generally cheaper and faster).

In any case, we recommend our test winner ETFinance, as it has the best conditions for buying shares.

Fees When Buying Stocks – How To Buy Stocks cheaply (cheaply)?

The questions “How to invest in stocks?” and “Where to buy stocks?” We must not neglect that buying securities is always associated with fees. These can vary depending on the broker, but investing in stocks for free is rarely possible. These fees reduce the profits in the end and should therefore always be considered. In addition to having a good knack for profitable investments, a trader should also analyse costs very analytically.

This is the only way to buy stocks cheaply. The share fee comparison below shows the best and cheapest deals. By the way: have you ever tried to buy shares and use a savings bank account? You should quickly find that our tips on the best depots offer significantly cheaper and better services simultaneously.

We compare the fees of the largest brokers with the following example:

  • We buy Spotify shares worth € 1,000
  • We hold the Spotify shares for a month and sell them again
  • We assume that the course will not change in the 30 days

With these assumptions we now compare the fees of Libertex, ETFinance & Plus500 :

providersLibertexETFinancePlus500
Depositfor freefor freefor free
Purchase fees€ 2.200%3.08%
Holding feesfor freefor free0.05%
Sales charges€ 2.200%3.08%
Payoutfor free5 USD1.9%
Total fees€ 4.40€ 4.22€ 92.32

Other factors when choosing a share portfolio

The provider should stand out due to its reliability and transparency, as well as high security. Stocks and indices or index funds and ETFs (Exchange Traded Funds) should be in the broker’s offer. High-quality prepared real-time prices and news about the stock exchange also help the investor choose the right share.

The central part is the trading area, in which the stock exchange prices should also be displayed. If the user interface is well structured and gives a clear impression of the current profits/losses, you can feel comfortable. Advanced investors should also value a whole range of tools.

Learn essential stock trading terms

It can only be an advantage for every investor if he is familiar with all the stock trading terminology. So here we give the first outlook on definitions that every investor should master in their sleep.

price

The purchase price at which a share can currently be purchased

price offer

The current price that you currently get when you sell the stock

Spread

The difference between buying and selling price. Many brokers earn their money with the spread. However, the spread can also be a sign of the liquidity of the selected asset.

Commission / fees

The commission is payable when buying stock from a broker. It is a fee that differs from broker to broker.

Market order

This is the order of the chosen broker to buy a certain share for the investor.

Limit order

A limit order contains the instruction to buy a certain share only at a certain price (or below) or sell only at a specific price (or above). The point in time depends, of course, on the price of the selected share.

Stop Loss Order

If you set a Stop Loss, the stock will automatically be sold when the price falls below the selected limit. This function can help limit losses.

Market Cap

The total value of a company whose shares are traded on the stock exchange. The market gap is calculated by multiplying the absolute number of shares by the current share price.

dividend

Many companies let their shareholders participate in the company’s profits. These distribute a dividend once a year, which can bring the shareholders an attractive additional income.

Price / earnings ratio

The P / E ratio, also known as P / E, or PER, is the quotient of a company’s share price and earnings per share. This value is used to evaluate a company and can show whether a company is overvalued or undervalued.

IPO

An “Initial Public Offering” (IPO) occurs when a company goes public and offers shareholders new shares for purchase.

Investment funds

A mutual fund is made up of many different stocks. An equity fund is usually managed by a fund manager who decides on the composition of the fund. One also speaks of an “open fund.”

ETFs

An “Exchange-Traded Fund” (ETF) is a so-called passive fund with a fixed stock composition. 

Blue-chip stocks

A blue-chip share is a share that a huge, established company issues. These companies have been in the market for a very long time, and their market capitalisation is usually in the billions.

 

Define a strategy to buy stocks

Before you can start, you should first consider your trading strategy. This step is best accomplished with five questions.

1. Is buying stocks right for me? What are the risks, and am I willing to take them?

These questions can by no means all be answered individually. Instead, the answers to all areas result in your strategy for stock trading. But let’s start with the first question: Anyone who buys a share is buying into a company.

In principle, there is always the risk that the group will go bankrupt. That happens over and over again. Nevertheless, numerous big brands have been doing solid business for decades. So there are always risks, but you can keep the dangers as small as possible through healthy risk management depending on your preference.

2. How much money should I invest in stocks?

Since the stock market is no longer like the security of a savings account, it would be very daring to invest all of your capital in stocks. So instead cost, young traders are advised to invest 30-40% of their assets in such securities. Older contemporaries are likely to be more concerned with security since higher capital is at stake, so a more conservative approach makes sense here.

20% in stocks makes sense even for a retiree. The remainder should be invested in fixed income securities and commodities like gold. It is also advisable to have a cash reserve to cash in when buying opportunities are favourable.

3. What winnings do I promise myself?

Now it gets interesting. In general, the higher the risk, the higher the potential gains. So if you have a lucky hand and invest in stocks from growth markets with good results, then you can generate strong returns.

However, 3D television was also predicted to have a glorious future, with moderate success. If the growth market collapses, all the money can be lost. On the other hand, there is no getting around to taking higher risks if high profits are achieved. Your portfolio should be based on these guidelines.

4. How do I choose suitable stocks?

Pretty much everyone asks themselves that, regardless of whether they have already been able to trade stocks or whether they are still just starting their first trade as a beginner. On this page, we offer some tips and tricks as well as recommendations. All in all, you should plan a good spread of your investments.

In this way, you can bring stable values ​​with regular returns for long-term investments into the portfolio and achieve short-term returns through riskier stocks. Investment legend Warren Buffet is known, for example, for his focus on so-called value stocks.

5. Trading real stocks, CFDs or funds?

In general, real shares can be bought when trading stocks, but CFDs can also be acquired. Both options have their advantages and disadvantages. What Contracts for Difference (CFDs) are is explained in our CFD guide. It is an investment option for experienced traders with higher risks but also with potentially higher profits. There are trading and buying options for beginners and advanced users.

By the way, the other trading options are also impressive: you can also trade with cryptocurrencies and foreign currencies on the forex market. In addition, what is known as social trading stands out, where you can easily adapt trading strategies from other users.

Also interesting: ETFs that offer an entire portfolio, often managed by professional management.

Which stocks to buy: Recommendation

Blockchain stocks

Bitcoin stocks are becoming increasingly popular. Not every investor has a suitable crypto wallet, so blockchain stocks are enjoying increasing popularity. With these, the investor can benefit from the Bitcoin course or other coins even without a wallet. Bitcoin stocks come in a wide variety of forms. Whether a mining company, chip manufacturer or financial service provider, there are a wide variety of ways to fill your portfolio with Bitcoin indirectly. So you can participate in the world of Bitcoin or other cryptocurrencies even without your wallet.

Cannabis and marijuana stocks

Cannabis stocks haven’t been around for too long. It was only with the opening of various states in the USA that marijuana stocks experienced a boom. You have a choice of buying shares in companies that manufacture medicinal cannabis or investing directly in marijuana companies. The “green stocks” are enjoying increasing popularity around the world. The prices of the big cannabis companies should continue to bring decent returns in the future.

Energy stocks

Energy is not only a recurring topic in politics. Shareholders are also aware of the importance of energy shares for their portfolios. Moreover, since the big energy companies will gain more and more influence in the future, investing in energy stocks could bring investors profits in the long term.

Startup stocks

Which small businesses are the pearls of the future of stocks? We have summarised the most exciting values.

Turnaround stocks

Do you have a feel for turnaround candidates? If not, we will help you with tips and recommendations on stocks that may soon be able to build on old successes.

Uranium stocks

Do uranium stocks still stand a chance today? The analysis shows: absolutely! We present the five most promising uranium stocks of the year.

Top stocks 2021

In addition to the technical chart analysis, one point is essential to buy stocks online: the selection of the most promising stocks in 2021 and possibly stock buy recommendations. The industry also plays an important role here and news and facts, such as the last quarterly figures of the company you are currently dealing with.

Tesla stocks

Is Tesla the auto investment of the hour? In any case, the Americans are among the most traded values.

Amazon stocks

 For many, the Amazon share simply belongs in the basic portfolio of every modern investor.

Facebook shares

The social network has long since emancipated itself from its original platform. Most recently, billions of people were even talking about their cryptocurrency.

Microsoft stocks

Bill Gates has created a company that can still inspire the global computer market.

 

Porsche shares

Porsche is also in great demand internationally. That counts for the sports car models as well as for the Swabian share.

 

Buying stocks for beginners: indices

Overall, the topic of stocks is quite complex. For this reason, it is advisable to have a specific routine right at the beginning that determines your approach to buying stocks. This includes constant further training with the help of news, but also seminars from your broker.

Then you will also get indications as to which stocks you can buy now. Indices allow traders to bet on entire markets. So the portfolio is already put together.

Buy blocks of shares

In the financial newspapers, an investor or an institution has bought a block of shares in a company. But what does that mean?

A block of shares is a larger amount of shares in a company held by an investor and thus enables them to influence the company. In principle, it is not specified what number of shares a block of shares comprises. In this case, an investor can represent an individual, a company, and a foundation. The critical point is that the amount of stock is big enough to impact the company.

  • With ownership of, for example, 5% of the shares in a company, the convening of a general meeting can be forced, significant or resolutions can be prevented with 25% .

The difference in buying blocks of shares versus buying shares on an exchange is that the transaction usually takes place through an intermediary rather than an exchange. For example, banks often act as intermediaries between buyers and sellers.

There is also a difference in the price of the shares compared to on-exchange trading. When buying a block of shares, a premium or discount on the price of a share is usually agreed upon between the buyer and the seller.

Direct stock trading vs. CFD trading

Investors often wonder whether they want to buy shares directly or should instead try CFD trading. There are some differences between these two investment strategies. The most important ones are summarised below ( by the way, ETFinance offers trading in CFDs as well as real stocks ):

Direct stock trading

  • Actual ownership of the share
  • Profit/loss corresponds to the amount of the change in the exchange rate
  • If applicable, dividend distribution
  • Trading is only possible with purchased shares
  • Usually only profitable with a higher start-up capital
  • Lower risk / lower profit opportunities

CFD trading

  • Wide range of courses
  • Bigger profits are possible with a small amount of start-up capital
  • Higher risk / higher profit opportunities
  • Only indirect speculation on price developments
  • Profit/loss can exceed the rate of change
  • No dividend distribution

Is it still worth investing in stocks now?

The right entry time plays a significant role in stock trading, deciding about high returns or even losses. In general, timing is one of the most challenging questions in the world of securities trading. For example, after the strong rally last year, many investors wonder whether it is still worth investing in stocks or whether the train for high returns has already taken off.

The good news is that historically, it is never too late to invest in the stock market. In the past, there were always fluctuations in the markets and short-term boom phases, but also times of crisis. But if you take a step back and look at the long-term trends on the stock market, you can see that the markets are showing positive developments over the long term.

Of course, there are always companies that disappear from the stock market and other companies that develop significantly better than the rest of the market. But the market, in general, is pointing in a positive direction.

Generally speaking, it is never too late to invest in the stock market. The reasons for the positive trends in the stock markets can be diverse. One possible explanation is that our economic system is designed for growth. Companies are repeatedly forced by competition to develop new products and solutions and thus create new values.

Another explanatory approach even goes so far as to say that innovation and inventiveness are like people. Therefore, new products and ideas are constantly being realised, which lead to economic growth.

At the moment, due to low or negative interest rates on savings or other investment categories such as bonds, the stock market is one of the few ways to generate attractive returns on savings.

We therefore firmly believe that it is never too late to enter the stock market and that you can build up a fortune in the long term, even with small amounts.

An example clarifies the average annual return on the Dax since 1980 has been 11.2% annually. Thus, a monthly investment of € 100 in the Dax would have turned into a total of € 780,000 within the last 40 years (without considering inflation and fees).

  • This shows that, as an investor, you can build up a considerable fortune even with small amounts, thanks to the compound interest and the regularity of the savings instalments.

Buy stocks tips

Buying stocks is easier than ever, thanks to providers such as ETFinance . More and more new investors want to invest in stocks and often make the same simple mistakes that would be easy to prevent. So that you are one step ahead of other investors, we would like to give you seven tips for buying shares in this section:

1. Analysis of the financial situation

When investing in stocks, your financial situation plays an important role. Therefore, you as an investor should ask yourself: What is the total amount of my assets? How much of it do I want to invest? What amount do I want to invest monthly, quarterly or annually?

By answering these questions, you have a good overview of your assets and can consciously decide which amounts you want to invest.

2. What are your goals as an investor?

Before investing in stocks, you should consider what goals you want to achieve with an investment. For example, do you want to make high profits in the short term? Build up an additional long-term pension? Or do you want to save on a certain purchase, such as a house?

Depending on how you answer these questions, different investment strategies are recommended. However, so that you can achieve your goals, you need to define them beforehand.

3. Control your emotions

Investing in stocks is often a fascinating undertaking and is often characterised by emotions. This is a mistake that not only beginners but also experienced investors make. There are often many hopes and expectations associated with investing in stocks.

Therefore, it is essential to be aware of your own emotions and ask yourself why you want to buy a stock. Are you just jumping on hype, or do you believe in the company and its vision?

Our tip is, therefore: Be aware of your emotions and make rational investment decisions.

4. Buy the company, not the price of the stock

Know that when you buy a share, you are becoming a partner in a company. Therefore, before buying, you should consider whether you want to become a partner in a particular company and find out which business areas the company is active in, what goals it has and whether there is a good culture.

With these aspects, you can decide whether you and the company are a good fit.

5. Don’t panic

This tip follows from the third tip and is one of the essential tips when trading stocks. Think about why you would buy shares in a company and under what circumstances you would sell the shares again. With this knowledge, it is easier to hold on to the stock in troubled times or to decide whether the time has come to sell.

6. Invest in intervals

If you want to invest a significant amount, it is advisable not to invest the entire amount at once. Invest the sum at different times so that you don’t put everything on one card.

It is tough to find the right entry point in the stock market. If you choose several intervals, you pay the average price for a share. Sometimes you buy at high prices and sometimes at low prices. This minimises the risk of timing correctly.

7. Diversification

Don’t put everything on one card. Although this strategy can result in high profits, it involves high risks. Instead, bet on a variety of stocks from different industries and minimises companies from different countries. This means that another can absorb losses from one investment.

  • By following these seven tips, you will stay one step ahead of many investors and make informed investment decisions. The many small right choices add up over time, and you will increase your chances of successful investments significantly.

Buy stocks at ETFinance – Why we recommend buying at ETFinance

For buying stocks, we recommend the ETFinance broker. With ETFinance, you have a renowned partner at your side who can look back on many years of experience in the field of securities trading. At ETFinance, you can trade many international stocks commission-free and thus save a lot of money when buying and selling stocks.

In addition, ETFinance offers you a very user-friendly trading platform on which you can find suitable security in no time and start trading stocks. Moreover, thanks to the strict regulations by the relevant authorities, you can trade stocks securely on ETFinance.

All of these points speak for ETFinance, and that is why we recommend you to trade shares on ETFinance.

Sell ​​stocks

There are a number of reasons for you as an investor to sell stocks. In this section, we want to take a closer look at some of these reasons and point out when it is worth selling stocks:

  • The first situation you may want to sell stocks is that the stock has reached your predetermined price target, and you, therefore, decide to sell stocks and take profits. With this option, you could, for example, sell shares to the value of the original investment and continue to invest in the company with the profits.
  • Another reason for the sale could be that the company is developing differently than you suspected when you bought the shares. You, therefore, no longer want to be a shareholder in the company. In this case, it is advisable to sell your shares because you should only invest in companies whose vision you believe is realistic.
  • Perhaps you will also discover another investment opportunity where you see more potential for returns, or you want to purchase outside of the stock market and therefore liquidate your positions. As you can see, there are many reasons for selling shares in companies.

However, the sale of shares in companies should always be carefully considered. Be aware that the sale may cause you to miss out on dividends and that you may incur fees if you sell the positions. These fees can vary greatly depending on the broker. That’s why you should make sure that you choose a broker like ETFinance, for example, that offers you a magnificent fee structure.

Ultimately, it is your decision when the time is right to sell a stock. However, with our food for thought, you have a comprehensive basis to base your sales decision and thus make the right decision.

Where should you buy stocks? Buy shares without fees and costs from our test winner ETFinance:

Select broker

valuation

5.04.94.94.84.7

Mobile app rating

9/109/108/109/109/10

account

Min. Trade

25 €N / AN / A1 €0 €

lever

1:301: 2001:301:301:30

Margin trading

number of stocks

2,000+242516010,000+1000+

Number of ETFs

150250+N / A600+105

fees

Cost per trade

€ 0€ 0€ 2.5€ 3.95€ 0

costs per month

€ 0€ 0€ 10€ 0€ 0

ETFs

0 €0.01-2%2.53.90 €0.01% – 2%

Funds

from 0.09%0.01-2%N / A€ 9.900.01% – 2%

CFDs

from 0.09%0.01-2%2.54.90 €0.01% – 2%

Savings plans

N / AN / A0 €

Crypto

from 0.45%N / A2.50.01% – 2%

Bonds

from 0.09%N / AN / A3.90 €0.01% – 2%

Trading fees

SpreadsSpreads2.5Fixed feesSpreads

Withdrawal Fees

5 €0 €N / A0 €0 €

Inactivity Fees

10 €N / A8010 €

Deposit fees

0 €0 €N / A0 €0 €

Overnight CFD position

var.N / AN / A0.5%

Payment options

Credit card

Giropay

Neteller

Paypal

Sepa transfer

Skrill

Instant bank transfer

Buy stocks Conclusion

We have put together all the essentials. However, with steps on buying stocks, beginners can make the first stock trade as quickly as possible. If you are looking for stocks and want to buy them, use the instructions above. With our test winner, share trading is effortless, and the provider has a very sophisticated website to offer. The user interface of the smartphone app is also convenient and functional.

Thanks to the Internet, the question of “where can you buy shares” is easier than ever to answer. With the right broker, a suitable investment strategy and conscious risk management, you can now benefit from the stock market yourself. Even the question “which stocks to buy now” should have been answered by this page.

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4.9/5

Our recommendation: Trading at Investby

Our recommendation: Trading at Investby

  • The broker provides an Islamic Account
  • It provides a dedicated account manager
  • Receive customised investment news
  • Trade with a variety of assets
  • There’s no deposit limit
ABinvesting Review
4.5
4.5/5

Our recommendation: Trading at ABInvesting

  • Acknowledge the financial markets through education material 
  • Free VPS is available 
  • Get a swap discount of 50 per cent 
  • Islamic Account is available to traders 
  • Select account types of your interest
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4.9/5

Our recommendation: Trading at PrimeFin

  • Fifth decimal available 
  • Spreads begin from 0.03 pips
  • Commission is zero  
  • Full 10-hour support  
  • News alerts and VPS for traders

FAQs

Simply follow our instructions on our website. This guides you from choosing the provider to buying the stock itself.

CFD stands for “Contract for Difference” – it is something like a proxy for an asset on which this CFD is based. Such derivatives are available with every imaginable base value: stocks, funds, currencies or commodities and also crypto currencies can be included. Especially with stocks that are already very expensive, CFDs also allow entry into trading with lower investments. If you want to trade with such complex financial products, it is absolutely advisable to first deal with the technical features of these trading instruments in detail. The respective brokers also tell you time and time again that they pose a very high risk. Practice also makes perfect in stock trading.

This page will walk you through all of the steps you need to take to buy stocks online. Basically, stock trading is not rocket science, but there are risks that must be considered at all times.

Those who follow the instructions on this page have already cleared the most important hurdles to successful stock trading. However, an equity investment is still not a sure-fire success. A clear strategy is crucial for success when trading stocks. Investors also do well to be well informed at all times. Experience also plays a role that should not be underestimated. You will soon be able to make buy recommendations for your own shares. When looking for a suitable strategy, one should first be clear about how much risk one is willing to take. There are very helpful tests for this on the broker pages presented here, which help you to optimally assess your own skills. A fundamental distinction is made between an aggressive and a conservative investment strategy. Of course, there are all sorts of gradations between these two extremes. The basic principle applies: the more aggressive the approach, the higher the profits can be, even in a relatively short time. However, the higher the return, the higher the risk.

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