22nd March 2022

Understanding and buying shares

You've done it! Your securities portfolio has been opened and you have set your investment amount. Welcome to the stock exchange! You may feel a little lost as you don’t really know what to invest in, or how much or simply how to invest. Let’s begin by learning about the securities listed on the stock exchange, starting with shares. What are shares? And how do you buy them?

Everything there is to know about shares!


Did you know?

1. When you hold shares in a company, you are, to a certain extent, an owner of the company. Of course, you only own a tiny percentage, but it’s worth knowing, don’t you think?

2. Depending on which sectors you invest in, this can vary significantly. For example, the technology sector is known as being a volatile sector, unlike the energy sector and the services sector which are, generally, relatively stable.

3. Shares may be listed on multiple stock exchanges. Yes, the world contains more than one stock exchange! That’s why it is essential that you choose the market most appropriate for you. A few stock market indices that you may have heard of are: Dow Jones, Nasdaq, S&P, Dax, etc.

4. With multiple stock exchanges worldwide come multiple currencies! You must not forget the exchange rate when considering an investment in a foreign currency.


Learn the language of investment

Do you know how the markets and investment products work? If you are the type of person who is keen to know everything, then seek out information, read books and articles, watch videos, subscribe for magazines, listen to podcasts, etc. This will provide you with a good understanding of the subject in the best way possible.

Here are a few free websites and podcasts that we recommend to improve your knowledge:

Spuerkeess has also produced a Complete Investment Guide (Download the investor guide​​​​​​​).

These are only suggestions - there are, of course, many other financial websites and you should choose those that you find the most accessible.

 

Shares

What are they?

Investing in one or more shares makes you a shareholder, i.e. an owner of a fraction of a company.

The principle underlying shares and stock exchange securities in general is that they follow the fluctuations of the stock markets, i.e. they may go up or down in value as a result of minor changes or the smallest news item.

How to invest successfully

There are two scenarios in which you will make money from your investments in shares:

Where the company makes a profit, you will receive dividends (cash payments).

When your company performs well, the value of your shares will increase. You can then choose to sell them for a price greater than the price at which you bought them, thereby making a profit.

Shares are for you if:

  • you invest over the long term.

  • you have time each day to devote to reading news articles about your shares.

How to buy shares

To buy shares, you must have a securities account and/or a suitable investment tool. There are a variety of tools that you can use to buy your shares but ensure that the one you choose is appropriate to your level of knowledge.

Speedinvest, developed by Spuerkeess, is one of the software tools available. It is very easy to use and allows you to invest easily and directly via S-Net.

If you require any assistance, Spuerkeess is ready to help and also offers advisory services

Are you ready to buy shares?

Go to your securities portfolio or to Speedinvest to begin searching for the shares that you want to buy. Shares are searched for using their ISIN codes, which are alphanumeric codes, the first two letters of which identify the country in which the security was issued (for example, LU for Luxembourg, FR for France or US for the United States, etc.).

If you want to buy shares in a company, you first need to search for the company’s ISIN code, so that you can find it easily. Simply search for the ISIN codes on Google! You can then go to your securities portfolio and search for the shares using the 12-digit code, then buy the shares if you wish so. It’s as simple as that!

The golden rules for investing in shares:

  • Only invest money you don’t need in the short term.

  • Use a software tool tailored to your skill level to make investing easier.

  • Monitor the companies you have invested in.

  • Find out about transaction fees and set yourself a limit on your orders to avoid any surprises.

  • Diversify your investments (different companies and different sectors). The LUXFUNDS range of equity funds are a good alternative 😉.

     

     


Investments