The stock market is suitable for speculative purposes as well as for long-term investment and for building up a portfolio through regular purchases or share savings plans. If the focus is on speculation, there must be a certain willingness to take risks and accept losses. Long-term commitments require a corresponding time horizon of at least five, but preferably ten years.
Myth: Shares are ideal for young investors
The idea that shares are particularly suitable for young investors because of their long-term time horizon can be classified as an advisory myth. Especially at a young age, shares are often the wrong choice: If you are planning to move into your own home and start a family in a few years, you should not invest the capital saved for this purpose in the stock market. In the worst case, a pronounced bear market will otherwise delay your plans by years - and then buying a house will be less worthwhile for various reasons.
Equally wrong is the assumption that stock trading is not suitable for the "best years". At the age of 50, 60 or 70 there is often enough free capital available that is neither needed for basic retirement security nor for starting a family. If money is to be invested profitably for the benefit of one's descendants, there is also nothing to be said against the stock market.
Stock market with curbed risk?
Short-term speculation and long-term investment must be strictly distinguished as the motivation for entering the stock market. Short-term trading aims at exploiting temporary trends up to and including day trading. Even with a very narrow strategy to limit losses, the risks are higher than with a long-term commitment due to the large number of transactions.
Whether the stock market is a good address also depends on the rest of the portfolio. The typical German portfolio consists of owner-occupied property and life insurance and is significantly enhanced by an equity portfolio. Life insurance and owner-occupied real estate secure the personal subsistence level; shares can significantly increase returns and open up new scope in the long term.
Some strategies allow investments in the stock market with reduced risk. Many of these strategies can be implemented through investment certificates. A guarantee certificate, for example, guarantees the full repayment of the deposit at the end of the term and at the same time enables a participation in price gains of the stock market. Whether such products make sense also depends on the market situation.
Share trading is no more complicated than online banking
The barriers to entry for private investors in exness forex broker login in equity trading are no higher today than those for online banking. Brokers accept securities orders comparable to simple bank transfers via protected customer portals and forward them to the stock exchange. Orders are usually authorised via PIN/TAN combinations as in online banking. At full-service banks that offer both payment transactions and securities trading, the securities account and clearing account are often set up as a sub-account of the current account. Thus, no special technical knowledge or requirements are necessary for share trading.
Flat-rate taxation by the broker
There are also no significant hurdles with regard to taxation. Since 2009, both dividend payments and price gains have been subject to the flat-rate final withholding tax of 25 % plus solidarity surcharge and, if applicable, church tax.
The tax is calculated directly by the bank or broker, withheld and paid to the tax office in full. The only exceptions are brokers based abroad and personal income tax rates below 25 %.
The capital requirements for private investors are also manageable. Most online brokers open securities accounts without a minimum deposit. Some, however, charge additional fees if the securities account balance falls below € 5,000 - 10,000. This is considered a reasonable minimum capitalisation for trading in shares. For trading in leverage products, about 1,000 - 2,000 € are sufficient in principle, CFDs and binary options can already be traded from three-digit deposits.