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Investing In Stocks

What if I told you that it is possible for you to own a share of the biggest tech titans in the world?
Owning for example a small piece of a streaming giant like Netflix or an online retail king like Amazon?
Pretty exciting, huh? Well… that’s exactly what stocks could give you and we are here to show you the way!

Investing in stocks is easier than most beginners might think!
All you really need is to obtain some proper investing knowledge for beginners (leave this to us),
and a reliable online broker to get started. 

Investing In Stocks

Investing in stocks is easier than most beginners might think. All you really need is to obtain some proper investing knowledge for beginners (leave this to us), and a reliable online broker to get started. 

Best Online Brokers For Stock Trading in 2021

Freedom24

The only European broker listed in NASDAQ

  • Get access to 1,000,000+ trading instruments
  • Invest in stocks, ETFs and bonds with 0% commission for the first 30 days!
  • Get exclusive access to IPOs

*Minimum First Deposit: $0. Trading fees apply after the 30-day promo period ends. according to your Service Plan. Investments in securities and other financial instruments always involve the risk of loss of capital.

DEGIRO

Invest with the best discount broker of the market

  • Extremely low commissions!
  • No min. deposit, inactivity or withdrawal fee.
  • Investing in the biggest US Stock Exchanges is commission-free!

*Minimum First Deposit: $0. Fees apply. Investments may produce profit for you, but they also involve the risk of losing your capital.

What if I told you that it is possible for you to own a share of the biggest tech titans in the world? Owning for example a small piece of a streaming giant like Netflix or an online retail king like Amazon? Pretty exciting, huh? Well… that’s exactly what stocks could give you and we are here to show you the way!

A good starting point could be a company you’re familiar with. Or maybe you can do your own research on the financial statements, news, and analysis, which could help you determine what stock has the potential to grow, and make your choices accordingly. It is ideal that you choose a broker that offers a variety of instruments in case you decide to diversify your portfolio in the future.

If you have not opened an investment account with any broker yet or you’re having a hard time finding the perfect option for you…no need to worry. Our job is to get all that untangled! 

Check our top picks of online brokers for every kind of stock investor, whether you’re looking for a broker with low commissions, the broadest range of stocks, the most features, or more! We’ll help you find the platform that allows you to build your way into a great portfolio. 

What Are Stocks?

Investing in stocks just means buying small shares of ownership in a public company. Those tiny shares are known as the company’s stock. By investing in them, you’re hoping the company grows and performs well over time.  If that really happens, the company’s stock increases in value as well. And guess what…Your shares may become more valuable. In that case, you can make your own profit from stocks. And how is that? You can simply sell your stocks to other investors who are willing to buy them from you for more than you paid for them.

The real question is…How to do that? Well, becoming a stock retail investor (a fancy term to describe the everyday person that owns a bunch of stocks) is something that anyone can do. One of the best ways for beginners to get started investing in the stock market is to open an online brokerage account. Opening a brokerage account is typically a quick and painless process that takes only minutes. After that, you are ready to place your first trade and begin your journey into the stock market. And the best part? Some brokers, like DEGIRO, offer you the opportunity to trade stocks with extremely low (or even 0%) commissions, ideal for high-frequency trading! In fact, when it comes to the biggest US exchange markets like NYSE or NASDAQ, starting December 2021, you can invest in stocks with 0% commission! What more could you ask for?

Trade Stocks With Extremely Low Commissions

Trade Stocks With Extremely Low Commissions

DEGIRO is not the only online broker that offers account plans with very low commission stock trading. Freedom24 also holds the same benefit if you open a Free Account. Actually, you are given the opportunity to invest in stocks, ETFs, and bonds commission-free for the first 30 days immediately upon account creation!

Gain Access to 1,000,000+ Assets

Get access to 1,000,000+ Investment Products

Why Invest In Stocks?

Investing in stocks can be a great way to grow your wealth over time. Over the years, stocks have delivered excellent returns to investors over the long run. But always keep in mind that every type of investment contains risks and stocks are no different. Stocks don’t rise in a straight line. Their prices can move down as well as up and they tend to experience periods of bad performance every now and then.

Yet, this is not something that should be a roadblock for you, since studies have shown that stocks are one of the best investment instruments you can go after. So even though they carry more risk than some other investments, they also have the potential to reap higher rewards.

How Could You Potentially Profit From Stocks

So in case, you’re wondering in which ways you could potentially profit from stocks I’m here to tell you that there are three main ways:

⮕ Rising Stock Prices: If the price of a stock goes up during the time you own it, you can sell it for more than you paid for it. For example, if you buy one Amazon share when the stock is trading at $1500 and it rises to $1700, you can sell it for a $200 profit. Have in mind that this way of potential profit addresses both investors, who seek gain from long-term investments, and traders who are willing to generate short-term profits.

Falling Stock Prices: This way of profit addresses exclusively traders who can bet against stock prices rising via investment products that allow them to do so. Some financial tools enable traders to profit from a security’s price movements – in both directions – without actually owning the underlying security. So, if you open a ‘short’ position on a stock, betting on its price fall and the price actually falls, you can close the trade for a profit. Note that not all platforms offer this type of investment service.
Yet, keep in mind that such investment activity is quite complex and it’s accompanied by a high risk of rapid capital loss. So before proceeding in such a type of trading define your risk tolerance first. 

⮕ Through Dividends: Dividends are regular payments that some companies pay to their investors out of their profits. Not all companies pay dividends but many well-established companies do, typically on a quarterly basis.

Pros & Cons Of Stocks

Historically, the stock market was generous to many investors over time, delivering great returns. But it also goes down, presenting investors with the possibility for both profits and loss – for risk and returns.

Stock investments tend to produce high returns over the long term with most investors intending to buy low and then sell high. It is an ideal type of investment for buy-and-hold investors who expect to see the company’s earnings and stock price grow over time. What’s more, you can buy and sell stocks easier than other assets. You can purchase them through a broker and once you’ve set up an account, you can buy stocks in minutes. The stock market also allows you to sell your stock at any time turning your shares into cash quickly and with low transaction costs.

However, all these benefits, as it always is the case with investing, comes with a corresponding risk of losing your capital! If you put all your money on a specific stock, then you take the risk of losing it all.  For example, if a company does poorly or goes bankrupt then investors will sell, sending the stock price plummeting. So putting all your eggs in one basket is never a good tactic. You can spread your money over many different stocks to lower your investment portfolio risk. A well-diversified portfolio should keep you safe if any company goes under, because the loss from this company’s fall can be balanced out by another stock’s rise. Also, remember that trading stocks immediately puts you into an emotional rollercoaster as stock prices rise and fall second-by-second. Individuals tend to buy high, out of greed, and sell low, out of fear. So you need to be prepared by devoting time to do your own research and constantly monitor the stock market in order to make informed decisions! Put logic over emotion when it comes to your precious capital.

Pros

High return potential over the long-term 

Easier to buy and sell than other assets

Spreading your money over many different stocks is the best way to diversify your portfolio & lower your risk

Needs relatively small capital to begin with

Cons

Emotional ups and downs

Takes time to research

What Drives Stock Prices?

What mainly drives stock prices is supply and demand. If there are more buyers than sellers of a stock, its price will rise. On the other hand, if there are more sellers of a stock than buyers, its price will fall. Factors like company and competitor news, analyst upgrades and downgrades, government policies, and others can directly impact supply and demand. For example, if a company announces that its profits are higher than what was expected from this company in the market, demand for its stock is likely to rise, pushing its price up. However, if a company announces that it is experiencing operational problems and that its profits will be lower than what the market was expecting, demand for its stock is likely to fall, pushing its price down. You could say that it’s a marathon, featuring the believers and the non-believers of a company.

What does all that mean? It means that before investing in a specific stock, it would be good for you to get familiar with a range of factors — such as the company’s financials, leadership team, and competition. Maybe the company has announced an upcoming product or service that you think will revolutionize the company’s sector. That’s a good call to buy. If, on the other hand, a company’s future planning and product roadmap stop going in parallel with your high expectations, that’s an informed no-buy for you.
In any way, you’ll be able to evaluate a stock and decide whether it deserves a spot in your portfolio.

Which Types Of Investors Do They Address?

Either being an investor or a trader, you definitely have a place in the stock market! Which path of these two you’ll follow really comes down to three things: 

⏳ the time horizon for your goals

⚠️ how much risk you’re willing to take

💼 your experience in the financial market

If you’re more of a long-term investor and you’re investing for a far-off goal, like retirement, then stocks could potentially prove to be a beneficiary type of investment. And what’s more important is that by following a buy-and-hold strategy you could reduce substantially the risk in your portfolio. Investors tend to ride out periods of underperformance, with the expectation that stocks will eventually rebound and any short-term losses will be recovered. So any periodical ups and downs of the stock market could be balanced out in the long run.

If, on the other hand,  you’re willing to follow a ‘buy to sell’ short-term strategy, then you’re also welcome to try your chances with stock trading. Instead of focusing on the company’s long-term prospects like investors do, traders focus on which direction the stock is likely to head in next and try to profit from that move. However, you must be prepared to experience a higher risk since you are prone to short-term price market fluctuations that can affect your portfolio.  That’s why traders often use stop-loss orders to automatically close out losing trades at a predetermined price level in order to protect their capital.

So what about your level of experience? While stocks are great for many beginner investors, the “trading” part of this proposition is probably not. If you are a newcomer in the world of investing you should probably adopt a buy-and-hold strategy using stocks. That’s precisely the opposite of stock trading, which involves dedication and a great deal of research. So a more hands-off buy-and-hold type of investment could probably prove to be the ‘safest’ option for you in the future.

How To Buy Stocks

Investing in the stock market can be very rewarding, especially if you avoid some of the pitfalls that most new investors experience when starting out. Beginners should find an investing plan that works for them and stick to it through the good times and bad.

And what’s the first step of this plan? Finding the proper online broker, of course! When you’re looking for the provider that is most suitable for your needs, it is ideal that you choose a broker that offers a variety of instruments in case you decide to diversify your portfolio in the future. Many brokers now offer stocks commission-free. Besides commissions, it’s also important to consider other criteria, including a broker’s fund selection and tools for creating a well-diversified portfolio.

💡 Expert Hint: Take your time to do your research and examine all broker options that CapitalTale has to offer. You don’t have to put all your money into the same brokerage account. You can also diversify your portfolio by spreading your capital into different brokerage accounts and minimize your risk.

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