Stocks for beginners: How to invest cleverly in the future!

Stocks for beginners: How to invest cleverly in the future!

Around 12 million people in Germany invested in stocks in 2024, which corresponds to around one in six people over 14 years old. This high number illustrates the growing interest in stocks as a form of investment, but the low share quota compared to other countries is often attributed to a preference for safe investments. Another factor is the lack of knowledge about stock market topics. According to a survey by the banking association, over 50% of respondents said they did not know what was happening on the stock market. This uncertainty could further inhibit the willingness to invest, as stocks are considered a useful building block for retirement planning t-online.de reported.

Companies issue shares to raise capital in the financial market, and buyers thereby become shareholders. Shareholders benefit from price gains and dividends, but losses are also possible. The stock market value of a company, also known as market value, is calculated by multiplying the total number of shares by the current market value. The most expensive companies in the world include Apple, Microsoft and Nvidia.

Pricing and risk management

In the world of the stock market there are two central prices for shares: the ask price, i.e. the selling price, and the bid price, the purchase price. The spread between these two prices can be larger outside trading hours, especially for smaller stocks. An important concept in investing is diversification, which reduces the risk of a portfolio. Investors should invest in different companies and asset classes to avoid cluster risks that arise when investing in just one stock. Diversification is a proven way to reduce the risk of loss, explains tomorrow.one.

Funds are another important tool for diversification. They bundle several stocks or securities and are divided into actively and passively managed funds. While active funds attempt to achieve higher returns through targeted selection of securities, passive funds replicate the development of an index. This offers investors the opportunity to further spread their risk.

Dividends and bonds

A central component of investing in stocks are dividends, which represent part of the profit that a public company distributes to its shareholders. These distributions are decided at general meetings but are not guaranteed. High dividends can indicate that companies may not have suitable investment opportunities. In contrast to stocks, bonds act as fixed-interest securities with a fixed term. They offer lower price fluctuations compared to stocks and are also popular investment options.

The way investments are managed has also changed. Digital fund management today uses artificial intelligence for data analysis to optimize the selection of securities. In addition, the choice between accumulating and distributing funds is important; While accumulating funds reinvest income, distributing funds pay them out in cash or as shares.

Brokers offer an important function for investors who want to actively participate in the stock market. These act as intermediaries and enable the buying and selling of securities. Online brokers in particular open up new opportunities for self-managers who use technology to trade independently.

In today's world, it is essential that investors familiarize themselves with basic stock market terms in order to make informed decisions. In-depth knowledge of stocks and how they work can not only increase confidence, but also contribute to stable retirement provision in the long term.