Article by Annette de los Santos; updated on 21.04.2022
Equities as an investment are becoming more popular in Germany, because more and more Germans have dared to invest in recent years
on the stock exchange. More than 12 million people in Germany are now shareholders. In 2020, the shareholder ratio was
measured by the total population at 17.5%. (Source: Deutsches Aktieninstitut ).
How to invest in stocks and earn money in the process, what requirements are necessary and how to
Avoiding pitfalls, we will examine in the following article. What are stocks?
Shares are shares in stock corporations (AG) or in partnerships limited by shares (KGaA). Ags
and KGaAs are corporations, i.e. unlike natural persons, they are so-called legal entities
Persons. This means that only the share capital is liable for you, not the shareholders with their private assets.
Legal entities are subject to the provisions of the German Stock Corporation Act. The share capital of AGs and
KGaAs are divided into shares, which are denominated in a so-called nominal value and a certain proportion of the share capital
confirm by documents.
Joint-stock companies and partnerships limited by shares may, but do not have to, be listed on the stock exchange. Only
Shares of AGs and KGaAs listed on the stock exchange are freely tradable. Partnerships limited by shares are relative
Rare, well-known example in Germany is the company Henkel. Most of the shares traded on the stock exchange are
Shares in public limited companies.
A distinction is made between bearer shares and registered shares. Both are securities with
the difference that registered shares are in the name of the bearer.
From an investor’s point of view, the dividend is the return on the capital invested. Shares grant the right to a
Dividend, i.e. once a year, is decided by the Annual General Meeting of all shareholders with voting rights
on the distribution of the result achieved in the previous year, if this is positive. Shareholders with voting rights
are the holders of ordinary shares.
The shareholders with voting rights are the holders of ordinary shares. Some companies (e.B Volkswagen AG)
in addition, so-called preference shares. Preference shares do not grant voting rights, but you receive a somewhat
Stocks are securities that come with a “coat”, which is the stock itself and a “coupon”, which is the
Dividend entitlement. Registered shares are registered in a register, the so-called registered shares.
Share register. Why do many investors buy stocks?
Shares are not only bought because of the dividend entitlement, which usually exceeds 4.0% for the so-called blue chip shares from Germany.
lies. They are also bought because of their “intrinsic value” and the chance of appreciation.
Shares are not traded on the stock exchange at par value, but at market value. This “price” of the stock is the result
of supply and demand and is sometimes subject to considerable fluctuations. For shares traded on the stock exchange
, current prices are constantly determined.
On the stock market, 2 times 2 is never 4, but always 5 minus 1. You just have to have the nerves, the minus 1
How and by which factors supply and demand and thus the price of a share are determined is
one of the big question marks where even stock market professionals are not immune to surprises. For beginners, this is
the biggest hurdle, because many are afraid to enter the “wrong” course.
However, the “wrong” price cannot exist if you consider shares as an investment and thus as a long-term investment.
Looking at the development of the German stock index (DAX) since its first calculation in the
July 1988, it is found that the DAX from just under 2,000 points in 1988 by more than five times to over 11,000
points in December 2016. This corresponds to an annual return of 19.3%. If you look at it
On the other hand, the fluctuations to which the DAX was subject have also led to negative returns in the meantime.
Government bonds could have been achieved. It should be noted, however, that one does not always benefit from the development in
of the past can infer the future. What are the requirements for investing in shares?
If you want to invest in stocks, you need a custody account and a
Clearing account at a bank. There are various online banks that offer you free custody accounts.
However, when choosing your custodian bank, you should pay attention to which order fees are incurred.
It is advantageous if the bank offers a demo account and sample custody account, so that you can deal with the
Be able to familiarize the trading platform before you bet real money. This allows you to use
experiment different stock market strategies and develop a feeling for the price fluctuations.
Last but not least, telephone customer service can be of great importance. You can use the Internet via various
Comparison platforms quickly and easily compare all online custodian banks operating in Germany and test results
understand. Take your time here and don’t just choose the cheapest price. The complete package should be delivered to you
In addition to the custody account, you need money that you do not need at the moment or in the longer term, i.e. cash,
that you would otherwise save or spend in the form of insurance premiums. A tip against an evil
Awakening: A total loss is never completely ruled out. Therefore, you only invest amounts that you invest in
can cope with a loss.
You can open a custody account relatively inexpensively with an online bank or an online broker. A
A good overview can be found on the Internet under the keyword broker comparison.Where are shares traded?
Shares of listed corporations or KGaAs are traded on German and international stock exchanges. In
Germany allows investors to visit various stock exchanges on weekdays, such as Berlin, Stuttgart, Frankfurt, Tradegate or Xetra,
act. Here are different fees, which are usually charged by the online banks in the price-performance directory
In addition, there is also over-the-counter trading for these securities. You can buy shares via
Buy your bank where you have the custody account. This can be done online, by phone/fax or
done personally at your house bank. Trading via online banks is faster and usually also significant
more cost-effective than with a branch bank. Trading there is usually on weekdays between 8:00 and 22:00
possible. Which stocks are suitable for beginners?
If you are buying stocks for the first time, you should
orient themselves on the DAX stocks and initially concentrate on regions whose markets and
Economies you know better.
The 30 largest German companies listed on the Frankfurt Stock Exchange are listed on the DAX. They have the largest
Market capitalization and the highest stock market turnover. These so-called “blue chip” stocks are a
good starting point for beginners to get started trading stocks.
If you are strongly interested in international markets, you can also buy foreign shares. Too
here you should first orient yourself on “blue chip” stocks, which are listed in the corresponding national index. In
In the US, the S&P 500 is a large index that tracks 500 large US companies.
Instead of buying individual shares directly, you can also opt into a stock savings plan or
Invest equity fund savings plan. A savings plan has the
Advantage that you place a standing order once, which is placed at the interval you specify
(e.B once a month) is executed on a specific day.
Over the longer term, this compensates for price differences when buying – so you do not rise to the “wrong” price,
but to the average price. How many shares should you buy?
“Don’t put all your eggs in one basket” – that’s an old stock market wisdom. This means that you don’t have everything on one
Share should set, but his stock portfolio between different industries and possibly also regions
should diversify (risk diversification).