Investing for beginners

Welcome to the DEGIRO Investor’s Academy; your hub for investment knowledge. Here you will learn what investing is, how it works, and which products you can invest in. Whether you are a beginner, or just want to update your knowledge, our lessons will help you get on your way in the world of investing.

What is investing?

Investing means placing your cash into certain financial products, with the aim of making a profit (called a return).

For example, you can buy shares of a company whose products or services you are passionate about. If the company does well and the price of this stock rises, you can sell your shares for a higher price.

Your investment strategy should be prepared and considered in advance. We provide you with all the elements to prepare an optimal investment plan!

Why should I start investing?

Not only should you start investing for the obvious reason; for the goal to have more money in the future. It is also a means to make sure your current capital keeps its value in the future. For some years now, savings accounts have been yielding little, no or even negative returns. As the cost of living may increase (inflation), this means your money might become less valuable as you can buy less with it in the future compared to the present. Therefore, by investing, you put your money to work with the hope of growing your money over time.

Investing means placing your cash into certain financial products, with the aim of making a profit (called a 'return').

For example, you can buy shares of a company whose products or services you are passionate about. If the company does well and the price of this stock rises, you can sell your shares for a higher price.

Your investment strategy should be prepared and considered in advance. We provides you with all the elements to prepare an optimal investment plan!

Not only should you start investing for the obvious reason,; for the goal to have more money in the future. It is also a means to make sure your current capital keeps its value in the future. For some years now, savings accounts have been yielding little, no or even negative returns. As the cost of living may increase (inflation), this means your money might become less valuable as you can buy less with it in the future compared to the present. Therefore, by investing, you put your money to work with the hope of growing your money over time.

The basic principles of investing

As investing requires some knowledge for beginners, we hope we helped you get on our way with the above lessons. Investing can be rewarding, but it is not without risk. When a company you invest in performs well and the demand for its shares increases, you can generally expect the value of your investment to rise. On the other hand, if the company's performance declines, the shares that you hold can decrease in value or maybe even become worthless. In other words, buying shares in a company is committing to sharing both its profits and losses.

To help you minimise the risk, always keep in mind the following principles:

Magnefiying

Only invest in what you understand, products but also companies.

The more you are interested in a company, the more you will keep yourself informed of its news and results. This way, you will be able to make informed investment decisions.

Diversification

Diversification: spreading risk is the key.

Buying shares of companies in different industries and geographical areas is essential to reduce risk. For example, if one industry or country suffers an economic or political crisis, then losses may be offset by gains from the financial strength of another sector or country.

Long term

Use money you can miss; investing is for the long term.

Make sure you only invest money that you will not need in the short term. This way, if prices fall, your investments will have plenty of time to become profitable again. By investing a small percentage of your savings each month, rather than a large sum at once, you reduce your exposure to market fluctuations.

ETFs, a good way for beginners to start investing

To help diversify your portfolio, it is also possible to get a selection of different financial products with a single purchase. Usually, buying many different stocks requires a large budget and takes a lot of time. However, ETFs make it possible to do this in a simple, cost-friendly way.

Simply put, an ETF is a product that tracks an index, a commodity, a bond or a composition of financial products. You can think of an ETF as a basket of securities. For example, an ETF that tracks the FTSE 100 will be composed of fractions of shares of companies within that index.

To make diversifying your portfolio as accessible and easy as possible, we offer to invest commission-free in a selection of ETFs, which cover a wide range of industries and geographical areas. It also includes plenty of ETFs with high ESG (Environmental, Social and Governance) ratings. You can find the list of commission-free ETFs and the conditions on our website.

ETF

Why do beginning investors choose DEGIRO?

At DEGIRO, there is no minimum amount to open an account and start investing, and our low fees make investing affordable for all investors. This means that you can start trading with a small amount of money.

With our award-winning, user-friendly trading platform and app, you can easily place orders on more than 50 exchanges from your computer or mobile device. Our platform includes many features to help you make as informed investment decisions as possible. We offer extensive financial news, real-time quotes, key ratios, financial statements, analysts’ views on stocks and more all within the platform.

Finally, we do not charge any inactivity fees, and money transfers and withdrawals are free of charge.

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Note: Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products which match your knowledge and experience.

Note:
Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products which match your knowledge and experience.