Anyone with a nest egg is looking for the best way to make it grow! From booklet A to life insurance, through rental investment or support for SMEs, there are many solutions. The stock market is obviously an essential one, in particular by the simple fact that it is accessible without having large initial bets. However, making your money grow through the stock market requires making the right choices, taking your time and respecting a few basic rules.
Take the time to understand to better invest
For many neophytes, the stock market evokes the image of traders in a frenzy on Wall Street. In reality, to win on the stock market, you have to keep a cool head and anticipate, more than reacting to daily fluctuations. Obviously, you have to know how to decide on your investments at the right time, but without giving in to panic or overreacting. To make a good start on the stock market, you have to start by studying how it works, reading, getting information, in particular through articles from specialized sites such as jepargneenligne.com. Because making the right choices from the start allows you to be on a royal road thereafter.
Choose a good broker
It is difficult to find the right intermediary to invest serenely, and benefit directly from the return on investment. The fees charged by brokers should be studied closely. Indeed, between those who apply brokerage fee rates of 0.10% and those who expect fees of around 2%, there is a good margin. Admittedly, 2% on the amounts committed, it seems finally quite little. But on an investment of a few thousand euros, over a decade, it is actually a few hundred or even thousands of euros lost. Thus, many new stockbrokers turn to the stock market activity of their traditional bank to invest in the stock market. It’s reassuring ! However, this has a cost well above the prices charged by online players, thus causing a lower return. And in reality, there is no more risk in going through an online broker than in staying in the bosom of his bank.
Know how much to invest
When investing in the stock market, you still need to know what assets to invest. Between the fact that the stock market is inherently a risky investment and the saying that « caution is the mother of safety », it is important to find a happy medium. Good stock market investments undoubtedly yield much more than all other existing investments. But conversely, these investments can turn against the investor. In fact, you don’t have to not invest all your money in the stock market. Having a little on the side means having your back covered, but it also means having cash to reinvest in the stock market during good times.
Choose the right type of account
Two main types of products, securities account and PEA, exist, with each of the advantages and disadvantages, which are summarized in this guide to investing in the stock market. It is essential to be well documented if you want to invest alone.
The PEA, equity savings plan, is often favored by people who plan to work on the stock market over the long term. Indeed, the PEA is fiscally advantageous, since the taxation of the gains, which is realized at the time of the closure of the plan, will decrease over time. Thus, after eight years, no taxation is planned, except for social security contributions. However, the PEA is limited, since it is limited to European companies and requires you to invest your money in shares, blocking, for example, any interest in bonds.
On the other hand, the securities account is a freer investment, since it is possible to buy all the existing financial products from around the world, with therefore, most of the time, better returns.
Everyone is free to have both types of accounts, even if, for a novice, starting with a PEA is more reassuring.
the stock market, or how to bet on the right horse
The stock market is anything but a trifecta. The idea is not to want to increase your profits quickly by betting on the horse, or rather the company, in good shape on such and such a day. And change before each race! It has been proven that the more traders carry out a number of transactions during the year, the less the return is important in the end.
It is therefore necessary to develop a specific strategy, which must be monitored over the long term. A company can very well know a rapid and significant embellishment, without that not implying that it has strong backs. The house of cards can fall as quickly as it was built. On the other hand, it is not because a company has a temporary difficulty, which results in a stock market dropout, that it is not going to allow good returns on investment in the medium and long term.
Thus, studying the company, which we think will maintain a competitive advantage for several years or which itself has a multi-year strategy that seems to hold water, is the basis of the reflection to be taken. Of course, this aspect must be highlighted with the cost of the action at the time of purchase. Indeed, a company may be strong, but if it has reached a glass ceiling, returns will be limited.
Thus, to get off to a good start on the stock market, you have to behave like a good father. Just as we weigh the advantages and disadvantages of each model before buying a car, we must do the same inventory before investing in the stock market : choose the right model, define your budget, find the company you will partner with.
Read also: What are the secrets of the history of the Paris Stock Exchange?