5/28/2023 0 Comments Trading stocks![]() ![]() If the stock you invest in underperforms, you will lose value on that stock and get lower returns, or even lose your original investment. Stock trading in Germany is generally much riskier than keeping your money in a bank because you’re buying into the success of a company or other financial product in an unpredictable market. That’s not the case with stocks and other investments. On top of that, state-run institutions (currently) run very little risk of going bankrupt and losing all of their money, and so your investment (money in your savings account) is quite generally safe. Things to keep in mind before you start trading With higher returns, comes more risksīecause banks make most of their profits by taking in deposits, loaning out that money at a higher interest rate, and then receiving high-interest returns on those loans, they have to keep interest rates on customer bank accounts low. Investing offers a way of combating this decline in value, by investing your money in stocks, bonds, and other commodities that offer a much higher potential return. In Germany, the inflation rate hovers at around 2.5%, meaning that if your bank is only offering a 1% interest rate, your money is losing 1.5% of its value every year. Inflation is a general rise in the price level of an economy over a period of time. This brings us to the next point about why people start stock trading in Germany – inflation. With interest rates hovering at about 1%, your money will do nothing but stagnate over time and actually decrease in value. If you’ve ever looked at the interest rates offered by German banks on savings accounts, you’ll notice that they aren’t very large at all. You may also simply want to increase your wealth. You may want a more comprehensive retirement plan, or want to achieve a shorter-term financial goal, like buying a house (which is my case, as you can read later down this post). There are many different reasons why you can or should start investing or stock trading in Germany.
0 Comments
Leave a Reply. |