The Stocks and ETF Guide: The Complete Guide for Intelligent Investing in the Stock Market, Targeted Wealth Building, and Secure Retirement Planning - Including Workbook and Day Trading Instructions E-Book

Moritz Borgmann

• Herausgeber: ONIX Media
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 205

Veröffentlichungsjahr: 2025

Beschreibung

The inflation is eating away at your savings, and everything is getting more expensive? Riester and savings accounts no longer contribute to building wealth but only bring wrinkles of concern? And you're wondering if it's even possible to build wealth on an average salary? Luckily, yes – and how this is possible with stocks and ETFs, even for financial market novices, you'll learn in this book! The financial certainties of our grandparents are outdated: savings accounts, Riester pensions, and similar products hardly yield anything anymore, and global turbulence is causing record inflation while exploding prices rapidly melt away savings. For the average earner, it seems impossible to save anything or even increase wealth – but that's a misconception! Because stock and ETF investments also offer enormous potential for this target group with unbeatable advantages: low-risk, long-term, and reliable investments, even for a tighter budget, and also beginner-friendly. This guide takes you step by step into the exciting world of stock trading, familiarizing you with essential basic knowledge and practically guiding you through your investment start. Can this be done by beginners? Absolutely! The structured, easily understandable, and comprehensive information in this book is designed so that even complete stock market novices can easily get started and begin building their wealth in no time.

Leseprobe

All advice in this book has been carefully considered and checked by the author and the publisher. However, no guarantee can be given. The author and publisher therefore accept no liability for any personal injury, property damage or financial loss.

Copyright © 2024www.edition-lunerion.de

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Edition 2024

Contents

Shares and ETFs - the question of why2

Aim of the book and the reading group2

Fundamentals of shares2

What are shares?2

Buying and trading in shares2

Types of shares2

ETF basics2

What are ETFs?2

Basics of ETCs2

What are ETCs?2

ETCs and ETFs in comparison2

Taxes for shares, ETFs and ETCs2

Reduce taxes on capital gains2

Taxes on old stocks2

Options for analyzing shares2

History of equity analysis2

What is a stock analysis?2

Is a stock analysis reliable?2

Carrying out a stock analysis2

Instructions for a stock analysis at a glance2

Balance sheets and key figures2

The balance sheet of a company2

Charts and trends2

Trends2

Directions of trends2

Charts and chart technology2

Examples of charts2

Trading indicators2

Special chart patterns2

Selection of shares and ETFs2

Selection of shares2

Key figures for shares2

Nine tips for equity investors2

Selection of ETFs2

Three steps to the right ETF2

Investment strategies2

Selection of the most common investment strategies2

Industries and sectors2

Classification of industries & sectors2

Risk and money management2

Difference between risk and money management2

Diversification2

Opening/managing a share deposit account2

Open a custody account2

Online broker or bank?2

Name product catalog2

Selection of trading venues2

Trading costs2

The psychology of investing2

Greed2

Pride2

Self-confidence / hope / fear2

Euphoria / frustration2

Gains / losses and how to deal with them2

Advanced strategies2

Stop-loss order2

Derivatives2

Workbook - an introduction2

Introduction (11 steps to success)2

Step 1 - Comprehensive basic knowledge2

Step 2 - Basics of chart analysis2

Step 3 - Personal goal setting2

Step 4 - Determine financial instrument2

Step 5 - Select broker2

Step 6 - Open a custody account / account2

Step 7 - Define strategies2

Step 8 - Apply risk management2

Step 9 - Trading diary2

Step 10 - Trading psychology2

Step 11 - Further development2

Resolutions of the exercises2

Bonus: Day trading2

Difference between day trading / scalping / swing trading2

Advantages and disadvantages of day trading2

Advantages and disadvantages of scalping2

Advantages and disadvantages of swing trading2

Why be active as a day trader ?2

Day trading as a profession2

What can a day trader earn?2

What should a day trader trade ?2

2 rules for successful day trading2

Create a trading plan2

Yield always has priority2

Do not use too many trading platforms at the same time2

Only trade with fixed position sizes2

Set rules2

Avoid typical beginner mistakes2

Keeping a day trading diary2

Shares and ETFs - the question of why

Nowadays, it is particularly important to think about your financial situation, especially for the future. Most of the time, it's all about one thing: rising costs! Everything is getting more expensive. Rent, energy costs and taxes are rising at a rapid pace in some cases, while salaries, wages and pensions are only increasing slightly.

So how can you save money and, if possible, increase it?

As described: This cannot be achieved in this form with a "normal" wage or salary. The "classic" savings account, which your parents and grandparents used to put money aside, has also had its day. This also applies to retirement savings, e.g. Riester pensions. Once again! All of these measures have one thing in common: they hardly earn any interest and high inflation also leads to a corresponding loss of capital.

So why not buy shares? "Too risky", you will probably say now - not true! Shares not only offer you interesting opportunities. If you take a clever approach and, in particular, invest your equity in a broadly diversified share package, a so-called ETF (see chapter 3 ff.), you can create a long-term investment for your retirement provision and allow your savings to grow steadily over the long term. Average returns of between 8% and 10.5% per year are not unusual.

Aim of the book and the reading group

This book is suitable for readers who are interested in share trading, want to get started as a stock market newcomer and build up capital, but still feel unsure and simply need the "last kick" to enter the stock market world. Shares, and in particular ETFs (see chapter 3 ff.) due to their broad diversification, are ideal for you as a newcomer to the world of finance and offer you a wide range of opportunities to build up capital. This book will gradually introduce you to the principles of share trading and you will learn,

to develop investment strategies,

Minimize your risk,

Keep calm,

to generate capital.

This is how your wishes, your dreams, can turn into reality!

Fundamentals of shares

What are shares?

A share is a so-called security with which you can acquire a share in a company (public limited company). From a precise point of view, a share is initially nothing more than an "ordinary" banknote. Both are originally marked with a printed, fixed value. The difference lies in the fact that the value printed on a banknote always remains constant. One hundred euros always remains one hundred euros, even if you cannot always buy the same amount of goods for it due to currency fluctuations. In the financial world, this printed value is also referred to as the nominal or face value.

Buying and trading in shares

First of all, you should understand the following technical terms that you will encounter again and again when buying and trading.

Important terms

Trader

A trader is a person who trades shares on one or more stock exchanges in order to make a profit. You do not need any special training or a degree to be a trader. However, sufficient knowledge of the financial world is essential. You could therefore act as a private individual as a so-called "private trader". Employees of a bank or a specialized trading company, on the other hand, are referred to as "institutional traders". In both cases, the trader bears the risk of losses.

Trading

This refers to the actual trading, the movement of shares, on a stock exchange.

Broker

A broker is an intermediary or agent who accepts purchases and sales of shares on behalf of a client and executes them on a stock exchange. Online brokers receive a commission for this service in addition to the normal fees.

Depot

A securities account is a virtual warehouse of securities, e.g. shares. A securities account is set up at a financial institution. All movements (purchases and sales) are carried out via the securities account.

Bull and bear market

What do these terms have to do with share trading? There is no precise answer to this question, but humans are naturally inclined to draw animal comparisons for particular events. One possible explanation would be:

Bulls run wildly towards a target with their powerful horns and can, for example, forcefully push the heaviest objects upwards from below.

Bears, on the other hand, use their strength to do the exact opposite. For example, they push their prey down with their powerful paws.

Both definitions can therefore be used as synonyms for sharply rising and sharply falling prices. The real prices are referred to as "bullish" or "bearish" in line with the market designations.

Whether these explanations are plausible or not, you will be confronted with these terms again and again in this book and certainly also in your future trading with shares, sometimes in a modified form.

Bull market / Bullish

But what are the economic factors that cause prices to rise sharply and thus revive a bull market? A variety of factors certainly play a role. However, the three most decisive ones are probably the following:

a strongly booming economy

resulting in a high employment rate

resulting in turn in a low unemployment rate

Investors pay particular attention to such price developments as they promise "quick money".

Bear market / Bearish

This definition is the exact opposite of the bear market. In this case, prices literally "plummet", and they do so sharply. Losses of 20 % per quarter are not unusual. It is therefore not surprising that investors are far more cautious when trading these shares. On the contrary! People are shedding shares, which is driving the price loss even further. Only shrewd gamblers are staying in the business now!

But what decisive factors play a role in the development of a bear market? Here, too, there are a number of factors, but all of them have an economic, political or social basis and are reflected in the value of a share. However, the three most decisive factors are probably the following:

Bursting speculative bubbles

Bursting real estate bubbles

Financial and banking crises

But how should you deal with bullish and bearish stock trends? Don't let your emotions get in the way. Bullish shares are generally characterized by great optimism due to rising prices. Bearish shares, on the other hand, tend to be accompanied by anxious feelings. Monitor share prices even more closely than usual and if you have a small appetite for risk, you may well make a profit.

Example: During a bear market, prices usually fall, even for shares that were originally traded at a high price. This is your chance to buy high-quality shares at a low price! If, for example, the opposite occurs after some time, the bull market, you can sell these shares again at a high price!

But why should you take this risk? The answer to this question is simple: share trading is subject to cyclical trends. You can assume that every bull market is followed by a bear market and vice versa. Only the timing is not subject to a cycle. That would also be the risk you need to consider.

Purchase of shares

You can purchase securities in three ways:

In person with an advisor at your financial institution

By telephone, e-mail or fax to an advisor at your financial institution

By e-mail online with your online broker

However, you will need one of two securities identification numbers:

WKN

This number is a combination of 6 numbers or letters, whereby the letters "I" and "O" are not used as they could be confused with the numbers "1" and "0". The WKN was primarily used in Germany before it was replaced by the internationally valid ISIN in 2003.

Example of a WKN

1

2

3

4

5

6

X

Y

Z

0

0

1

Abbreviation of the stock corporation

National identification number

or

ISIN (International Securities Identification Number)

This number is a combination of 12 digits consisting of numbers and letters. It can be used to identify most securities that are traded on a stock exchange. The ISIN was first used in 2003 as a replacement for the WKN.

Example of an ISIN

1

2

3

4

5

6

7

8

9

10

11

12

D

E

1

2

3

4

5

6

7

8

9

10

Country code

International identification number

Test no.

Trading in shares

Shares are not traded directly on the stock exchanges, but always via advisors at your bank, via advisors at direct banks or via an online broker. While bank advisors are also employed by banks, online brokers operate through companies that specialize exclusively in securities trading. The special feature of online brokers can already be seen in their name. They accept orders to buy or sell shares exclusively via digital channels. Advisors at house banks and direct banks can be instructed to buy or sell shares by telephone during business hours or by visiting the bank. Another advantage of bank advisors is that they can also provide advice on possible investment strategies during a meeting.

Trading costs of shares

Nothing is for free, as they often say. This also applies to a share deposit account. However, the costs incurred are not only within a manageable range, but are also calculated differently depending on the financial institution. The most common fees include

Custody fees

These are purely administrative fees charged by the financial institution. Custody account fees can be considered analogous to the fees for a safe deposit box. More and more financial institutions are now waiving this fee if there is a corresponding movement within the custody account.

Inactivity fee

This fee is payable if there is no trading activity over an agreed period.

Order fees

These fees are always incurred when an order is placed to buy or sell a security. These fees can be calculated differently depending on the financial institution, e.g:

Percentage

based on the volume of a purchase or sale

Flat rate

per order for a purchase or sale

Mixed calculation

across all transaction options (usually the least favorable form of fee, as small orders are charged at a high rate!)

Stock exchange fees

Fees incurred individually depending on the trading venue (stock exchange location)

Limit fee

This fee is charged whenever an order cannot be executed if there is a significant spread between the value at the time the order is placed and the value at the time of purchase or sale. Since this situation means considerable additional work for the broker and the non-executed transaction means that no order fee is incurred for a successful trade, this fee is charged.

Opportunities and risks of shares

As a newcomer to share trading, investing in shares is particularly suitable if you initially concentrate your activities on a single company (AG). With more experience, you can later put together your own individual share package with shares. In this way, you create a corresponding range of different companies. When you buy a share, you participate in the capital of a public limited company. On the one hand, you can participate in the financial success of the public limited company, but you may also be liable for the financial failure of the public limited company. You should therefore always be aware that shares not only offer opportunities, but also risks.

Opportunities: As already described, by buying a share you participate in the capital of a public limited company. By purchasing a share, you become a so-called shareholder, or more precisely, a co-owner with rights and obligations in this stock corporation. On the one hand, you can participate in the financial success of the stock corporation, but you may also be responsible for any financial failure of the stock corporation.

In addition to the purchase of a share and the resulting participation in the capital of the stock corporation, you also acquire rights and obligations, depending on the type of share issued (see section 2.2.8):

The most important rights are, for example

the right to have a say in the company

the right to vote at shareholders' meetings (AG Annual General Meeting)

Both rights are inevitably guaranteed in the company by the annual shareholders' meeting (mandatory by law!). At these meetings, you can directly influence the following topics, for example:

Approval of the annual financial statements and discharge of the Executive Board

Possible acquisition of new business areas

Raising capital for new business areas

Determination of profit distributions

Measures in the event of losses of the AG

Election of the Board of Directors for the new financial year (can also take place as a confirmation of the current Board of Directors)

Amendments to the Articles of Association

Risks

The particular risk when buying a share could lie in investing in a single company, as this makes you extremely dependent on the development of the company, especially a negative development. This alone is reason enough to quickly think about the aforementioned diversification of your shares once you have started trading shares.

Another fundamental risk lies directly in trading shares, or rather in the natural fluctuations of a share price. If you do not constantly monitor the price trend, you could quickly incur unwanted losses. This could even lead to insolvency (usually indicated by a rapid fall in the share price!) or insolvency of the company and thus to the total loss of your capital. The basis for this is that capital formed from shares counts as part of a company's share capital and is therefore regarded as assets in the event of insolvency.

General risks of shares

In addition to the risks already described, which you as an investor can discover during a regular price evaluation, there are also general risks over which you have no direct influence. These include, for example

The market risk

This term refers to unforeseeable effects on the stock markets resulting from problems in the global economy, major political changes and drastic environmental changes.

The credit risk

Credit risks always arise when the partner you are trading with gets into financial difficulties. One example would be the insolvency of a public limited company. When the insolvency is announced, you as a shareholder become the big loser.

You must expect the value of your share to fall rapidly in stock market trading, sometimes even to zero. But even if a small value is reached, this does not mean that this value will be paid out to you

They are supported by the German Stock Corporation Act, which basically stipulates that shareholders participate in the liquidity proceeds. However, the assets of the AG are usually not even sufficient to pay all of the AG's creditors, and you as a shareholder are still listed behind the creditors with your claims. In most cases, however, the available insolvency assets are no longer sufficient for the shareholders.

Liquidity risk

This risk always arises when buying and selling are not in line with supply and demand.

Example: You want to sell your share but are unable to do so at the desired price. As a result, you have no fresh capital available to buy another share. Your capital would therefore be tied up involuntarily.

Currency risk

This risk always exists if you buy a share in a foreign currency rather than in your home currency, e.g. in dollars instead of euros. If the exchange rate falls for financial reasons, the value of your share will also fall.

Example: The euro is devalued against the dollar. Due to the depreciation of the euro, you now have to pay more for shares that are traded in dollars.

Rights and obligations of a shareholder

When you acquire securities in a stock corporation, you not only receive financial shares in the company, but also specific rights, depending on the type of share. These rights are based on three key points:

the German Stock Corporation Act

the articles of association of the stock corporation

the extent of your shareholding in the stock corporation

Rights

Participation in general meetings of the stock corporation

As a shareholder, you will be informed in good time in writing by the stock corporation about an upcoming Annual General Meeting.

Note:

General meetings of a stock corporation are usually held once a year.

By registering in person, you acquire the right to participate in this meeting. The extent to which you can exercise a voting right depends on the type of share you hold. Only holders of ordinary shares (see section 2.3.1) and preference shares (see section 2.3.2) have voting rights.

Payment of a dividend

A public limited company will usually announce in advance of the Annual General Meeting that a portion of the company's profits will be distributed to shareholders. However, you only have the right to receive a dividend as a holder of ordinary or preference shares.

Right to information

The Management Board of a public limited company is obliged to provide a detailed report on the financial development of the business at an Annual General Meeting. As a shareholder, however, you also have the right to receive answers to questions on individual areas of the company.

Subscription right

In order to obtain additional capital, e.g. for a business expansion, a public limited company can issue additional shares. However, for you as a shareholder , this increase in the company's capital would mean that your capital-bearing shares in the company would decrease, as more shares would now be traded on the stock exchange. Possible dividends may also be reduced, as dividends would now be paid out to more shareholders.to prevent this, you as an "existing shareholder" have the right to purchase a quota of these new shares determined by the Management Board of the public limited company before the shares are put up for sale. This pre-purchase right is known as a subscription right.

Duties

Payment

As a buyer of shares, you undertake to pay for the documents immediately upon purchase. Subsequent payments, installments or other agreements are not valid.

Commitment to loyalty

By acquiring at least one share, you undertake not to do anything detrimental to the company. Although this is a general obligation, it is primarily assessed for major shareholders. In the case of small investors, potential damage is viewed more leniently. Nevertheless, you should comply with this obligation.

Types of shares

By issuing a block of shares and the resulting fresh capital, stock corporations aim to promote the development of the company on the one hand, but also to secure the company's liquidity on the other. These objectives are defined very precisely by the management board of the stock corporation in advance of a share issue. However, as buyers of these shares have a logical interest in generating profits with their invested capital, it is obvious that shareholders also want to exert influence on the company. It is precisely these opportunities to exert influence that are also defined in advance of a share issue by the management board of the public limited company - as are the obligations of the shareholders.

These different interests have now led to four different types of shares being traded on the stock market in accordance with German stock corporation law:

the ordinary share

the preference share

the bearer share

the registered share

These shares are explained in more detail below.

The ordinary share

This share is the most common form on the stock market. Shareholders with ordinary shares can exert a direct influence on the company's business policy by exercising their voting rights. Furthermore, they are all treated equally when it comes to profit distributions. This means that profits are distributed for each individual share and not according to the size of a block of shares.

In order to acquire an ordinary share, the future shareholder must make a so-called contribution in the amount of the fixed capital amount of an individual share. There is no obligation to make additional contributions. This means that the shareholder is neither obliged to increase his contribution nor is he liable for any losses incurred.