Become an investor

Germany is a developing country when it comes to trading on the exchanges: Although they are considered a high-return alternative to the standard interest rates, only about one in ten Germans trades equities. You can do better – and we’re here to help. With eight golden rules.

Tom Trading

1. Generate exchange-based knowledge.

Knowing the exchange fundamentals is key. You need this knowledge in order to correctly assess the broad variety of investment products and the related opportunities and risks – and take the right decisions. But don’t worry, understanding exchanges is not arcane. Background knowledge on individual asset classes, for example, can easily be acquired at one of our special exchange seminars or webinars. And it also makes sense to follow the news on companies, the financial markets and political changes – using our WhatsApp-Service you can even get the latest market news delivered straight to your smartphone.

2. Invest time.

Investing money is real work, though. One of the biggest mistakes is not to inform yourself properly before buying securities. You are probably painstaking about buying a new car and should be just as precise when it comes to the key financial figures of an exciting company, the products and services offered and the competitors. 

3. Define your investment goals.

What risk do you want to take? What returns do you expect on your investment? And what maximum loss will you accept? Answering these questions helps you avoid making hasty decisions and limit your risks. In general: The higher the return, the greater the probability of losses, too. And not to forget: Only invest the money if you can afford to lose it if the worst comes to the worst.

4. Practice with a dummy run using a specimen custody account.

Practice makes perfect: To avoid (expensive) mistakes, you can train how to act and react in different market phases – for example using a virtual specimen custody account. Practice with the investment total you actually have at your disposal and would use. And only add products to your portfolio that you understand and which match your personal type of investment.

5. Diversify.

Never put all your eggs in one basket – risk diversification is key: Two different securities in a portfolio is too few, 50 probably too many, as at some point you’ve reaped the benefits of diversification and any additional security just means extra work rather than added value. Anyone who covers large parts of the stock market using a single investment and in this way seeks to spread the risk can opt, for example, to buy an exchange-traded fund (ETFs). Here, again, it is important to diversify broadly across sectors, countries, and asset classes. Our Finder tools for every product class help you find the suitable securities.

6. Limit your losses.

Consider carefully at what upside or downside on the price you wish to sell. Set yourself exit limits and always keep to them. In this context, you can rely on the different Börse Stuttgart order types. Using a stop-loss order, for example, you can set an automatic exit point: As soon as a security hits a particular limit it automatically gets sold at the best possible price.

7. Keep a regular eye on your portfolio.

Check out your portfolio at least once a week and ask yourself how you want to proceed with certain securities. There are many ways of monitoring your custody account – for example with our app. It offers you not only portfolio management tools but also real-time data and videos on current market activities. And if you still have some questions after the order has been executed, then simply contact our Customer Support team - via WhatsApp, e-mail or phone, free of charge, of course.

8. Join our Investors’ club

We strongly believe that good financial knowledge about how exchanges and finances function is the best investor protection. Which is why we invite you to join our Investors’ Club: There you can attend regular Webinars, receive important Newsletters, etc.

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