How to Invest in Stocks: The Complete Beginner’s Guide

How to Invest in Stocks: you often hear about stock market investing, but you are not quite sure what it actually involves? You would like to start investing in stocks, but you don’t know how to go about it. Here is a complete guide to the stock market, how it works, and its advantages and disadvantages. Discover here how to invest in stocks.

What Is Stock Market Investing?

You are wondering what to invest in? The stock market is a complex arena to explore. Here are a few important points to grasp well before putting your money into it.

• Getting to know the stock market – Contrary to popular belief, the stock market is not a physical place, or at least no longer is. Originally, there were physical exchanges that investors could visit to invest. This was the case, for example, of Wall Street and of the historic Paris Stock Exchange housed in the Bougniart palace. Today, those buildings still exist, but they only house traders and a handful of online brokers. The real stock market is a virtual universe in which the various financial transactions are executed — above all, the buying and selling of stock market assets.
• Understanding the concept of exchanges – As we have just explained, the online stock market is a virtual domain on which financial instruments are traded. Investing in stocks therefore means exchanging assets, either by buying or by selling stock market products. In other words, investing in stocks means buying shares of companies listed on the stock exchange. You can then hold the shares you have just acquired while waiting for their value to fluctuate. And as soon as that value rises, all you have to do is resell your shares to make a profit.

Why Invest in Stocks?

• The main argument that justifies buying shares of a company listed on the stock exchange is the benefit the acquisition brings to the investor. Indeed, a stock represents a stake in a company. Buying those stocks amounts to investing directly in the company in question. As a result, you become the owner of an integral part of it, and you can position yourself as a collaborator or a partner.
• Stock market investing is an easy and simple act to carry out. Indeed, buying stocks, or investing in stock indices, requires no particular skills. Contrary to popular belief, you do not need to spend hours behind a screen reading charts or trying to understand the market in order to invest in stocks. It is true that figures and charts are very powerful analysis and forecasting tools.
  
• What is most interesting about the stock market is that it is an investment that pays off when you have a good strategy. So, to invest well in stocks, you simply need to hold the keys and the right methods. To that end, we invite you to discover the different strategies for success throughout this guide.
• Putting your money into stocks allows the individual investor to contribute to the development of the economy in general. It is therefore a way of building wealth for yourself but also for others, since the company you invest in will be able to pay its employees better if it is profitable. What’s more, it can pay you dividends if it manages to make profits over the long term. These will then act as passive income for you.

How Does the Stock Market Work?

• As we have just mentioned, the stock market works on the principle of supply and demand. Supply represents the quantity of financial assets existing on the market at a given moment. It can be defined as the number of units of an asset that are available and accessible for purchase.
• Demand represents the number of investors interested in a stock’s price — that is, the number of people ready to buy shares of a company. Each of these investors is required to tell their broker the minimum and maximum price at which they are willing to buy a stock.
• The workings of all assets (stock market or otherwise) and the evolution of prices rest on this principle.

Buying Stocks Directly on the Stock Market

• The most obvious option for investing in stocks is to go through direct stock market investing. This method applies to every type of investment and can be set up in different ways. All you have to do is place your stock order and tell your broker the type of investment you want to make. The broker will then forward your order to the market.
• Direct stock market investing offers many advantages, notably in terms of reliability and profitability. It also guarantees you a level of returns that no other investment method can offer.
• When you invest in the shares of listed companies, you become the owner of an integral part of them, and you can position yourself as a collaborator or a partner.

Investing in Stock Market Indices with ETFs

• Besides using diversification vehicles, it is possible to invest in stocks through indices or by taking positions with tracker funds. Indeed, stock indices are vehicles created to measure the performance of a region or a sector. They group together the stocks of a given geographical zone or field of activity. Their evolution therefore depends on that of all the company stocks in the same theme or in geographically close areas.
• By investing in a sector index, you benefit from the success that companies enjoy in that field. Moreover, the other most obvious and direct option is the choice of ETFs. Known as index funds or tracker funds, ETFs are exchange-traded derivative products designed to track and replicate the price of stocks. Those stocks are called the underlying assets. An ETF can be based on the value of an index or directly on listed stocks.
• The exchange-traded fund based on the stock index invests in all the stocks that make up that index. In practice, it works by replication, reproducing the trends recorded by the reference index. In other words, when the index moves, the ETF follows the same movement. Likewise, when the underlying index falls, the value of the ETF drops as well.
• Finally, tracker funds based on stock prices work in the same way as index funds: they track and replicate all the movements of the stocks of the companies they are based on. Remember that management fees on Exchange Traded Funds (ETFs) are lower than on conventional investment funds.

Investing in the Financial Markets with Derivatives

• To invest in stocks, several options are open to you in terms of financial instruments. You have direct stock market investing, registered ownership, and the use of portfolios. If these methods do not suit you or seem too complex, you can turn to derivatives. These are financial instruments generally made up of leverage that allows you to invest in stocks efficiently. With this type of instrument, you cannot make long-term placements.
• Here, it is much more about trading than investing — the core of the investing vs trading distinction. In other words, on the derivatives market, you can only speculate on securities in the short term. However, derivatives do not suit every investor profile. Only the experienced trader, aware of the risk, can understand how this type of product works. Indeed, it is a very complex instrument with somewhat higher risks.
• Also, derivatives are influenced by many factors, notably time value, movements in the underlying price and leverage. However, the purpose of derivatives is not limited to short-term speculation. Indeed, they can allow the investor to hedge a portfolio as a starting point.

How Much Does an Investment in Stocks Cost?

• Brokerage fees – Like all types of investments, buying stocks inevitably involves fees and other expenses. Thus, depending on the broker chosen or the type of investment (active investing or passive investing) and the instruments used, and the type of account opened, fees and costs can vary. That being said, the most common fees charged by stock brokers are brokerage fees. These are the fees tied to executing stock market transactions. That is to say, every time you buy or sell a financial security (stock, ETF, index), you must pay brokerage fees. These fees can vary depending on the broker and the plans they offer. Some neo-brokers, in order to attract investors, do not charge brokerage fees.
• Custody fees (droits de garde) – Stock market investing inevitably involves fees or other expenses. Thus, depending on the broker chosen or the type of investment and the instruments used, and the type of account opened, fees and costs can vary. Beyond brokerage fees, there is another category of fees that some brokers charge their clients: custody fees. These fees are however very rare today, as they are no longer offered by most brokerage firms. That said, some banks or investment institutions continue to charge custody fees to investors. In practice, these are annual fees charged by the broker or the site on which you hold your assets — in effect, the fees the financial intermediary charges in order to keep your securities safe.
• Foreign exchange fees If your goal is to invest in stocks, it is necessary to plan an appropriate budget. It must be made up of the amount you intend to invest as well as the fees to pay for buying or selling the stocks. To do this, you need to check with your broker to get an idea of the various fees to pay and how much they cost.
• Stock market product fees – You have probably already understood this, but fees are an indispensable part of any investment. In practice, whatever broker or financial intermediary you choose, you will have to pay fees. These can vary depending on several factors — notably the broker’s terms and conditions, the type of market, the type of wrapper, the financial instruments used and the amount invested.
• Other types of fees for investing in stocks – Beyond all the fees listed above, there are other types that you should know about before investing. Indeed, investing in stocks is not limited to buying or selling assets. On the contrary, it requires carrying out several other operations, notably in terms of analysis, creation and protection. Thus, depending on the different operations you carry out, fees and costs can vary. Inactivity fees, for example, generally affect passive investors who want to invest over the long term. Indeed, inactivity fees are charged when you make no buy or sell transactions on your account for a certain number of days, weeks, months or years. That period also varies depending on the broker and their terms. We can also mention fees for real-time market data quotes or for access to a more advanced trading platform. The latter are charged by the broker that provides the analysis and investment tools and gives you exposure to the markets. In any case, every intermediary has its own requirements and its own way of operating. It is therefore up to you to structure your investment according to your needs, your goals, your resources and your current situation.

Minimum Age to Invest in Stocks

In truth, there is no minimum age for investing in stocks, because it all depends on your level of involvement and your goals. If you choose to use a PEA (Plan d’Épargne en Actions, the French tax-advantaged share savings plan) to invest, you will have to wait until you reach the age of majority. However, there is the PEA Jeunes option, which allows you to invest in stocks even as a minor still attached to your parents’ tax household. You can also use share dealing accounts (comptes-titres) to invest. For that, you simply need to be able to understand how the market works well enough to get started.

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Should You Invest in Stocks in France Right Now?

When it comes to investing in stocks, the right moment depends on the type of asset you wish to invest in. That is why it is important to always analyze securities before investing, in order to avoid unpleasant surprises. What’s more, since the stock market is in constant flux, there is no ideal moment to make a placement. The essential thing is to weigh the pros and cons and choose the most sensible option.

Which Companies Should You Invest In on the Stock Market?

1. Investing in Amazon stock;
2. Buying shares of the American giant Google;
3. Investing in Microsoft stock;
4. Tesla stock: the best stocks to buy right now;
5. Investing in stocks: buying Apple stock;
6. Buying stocks listed on the Nasdaq;
7. Investing in the stocks that make up the CAC 40

Where Should You Invest in Stocks?

To invest in stocks, you should turn to a regulated online broker, which is a first-rate choice. Indeed, going with a regulated broker guarantees you reliability and security in your transactions. Not only do you benefit from the best fees, but you also get access to direct stock market investing through that broker.

A Few Tips for Investing in Stocks

• Only invest in stocks money you are prepared to lose
• Take a long-term view
• Get trained and stay informed before investing in stocks
• Read up on the subject of the stock market
• Know your investor profile well before putting your money into the stock market

How to Invest in Stocks: Definition

Investing in stocks means acquiring financial securities (mainly stocks, but also ETFs) issued on the stock market by companies. A positive return on investment, or capital gain, is achieved on this investment when you resell the assets you have acquired at a price higher than their purchase price.

By putting money into the stocks of companies, you take part in financing them and can generate income from this investment. Investing in stocks in France means becoming the owner of a share of a company, which makes you a shareholder.

How Does the Stock Market Work?

The stock market is a space, or market, on which the meeting takes place between agents seeking financing (listed companies) and economic agents who own capital (the public and certain legal entities) and can provide it to the agents that need financing.

Stock markets are organized into marketplaces with a national or regional vocation, which are themselves divided into segments in which various types of financial securities are traded. To illustrate in more detail how the stock market works, we present its various players (with the equities segment as the main reference).

Who Are the Players in the Stock Market in France?

• Companies listed on the stock exchange (the issuers): to meet their financing needs, they put up for sale on the stock market stakes in their capital in the form of shares. It is the future profitability drawn from the use of this capital that will generate the wealth needed to reward those who hold shares in it.
• Investors: these are the economic players who put up capital to buy (and later sell) shares. This acquisition is initially made from the issuing company, then from one investor to another on the market through stock brokers.
• Intermediaries or investment services providers: these are the banks and the brokers — financial institutions that act as intermediaries between a seller and a buyer of financial securities. They forward buy and sell orders for securities to the financial market.
• Market institutions: these are the companies that run the financial marketplaces, as well as the stock market regulator that oversees them. In France, it is the AMF (Autorité des Marchés Financiers — the French financial markets authority) that constitutes the main market institution. It plays the roles of regulator, judge and policeman toward all the other market players, and ensures the protection of savers (their capital and their interests) who invest in stocks.

Why Is It Worth Investing in Stocks in France?

• Take part in the functioning of the real economy: the money of the investor who invests in stocks allows the company to grow. A company’s stock market listing often makes it possible to fund development plans: major investments, external acquisitions, research and development, etc.
• Easily become the owner of a major company: founding a company and growing it are arduous tasks. Acquiring shares through stock market investing allows you to directly own large national and international companies.
• Grow your capital: even though it is important to note that investing in stocks in France is risky, it should also be pointed out that stocks offer a far higher return than bank deposits and other instruments, with manageable risk. In 2018, for example, the average annual performance of a stock held for 15 years was estimated at 6.5%.

Which Financial Products Can You Use to Invest in Stocks in France?

• Stocks: you can buy companies’ shares and be the direct owner of those shares. You can hold shares in registered form: the shares are recorded in your name in the company’s books. The other option is bearer shares: the shareholder remains anonymous. Directly holding shares can allow you to benefit from advantages such as information rights and any dividends, as well as very low or zero management fees.
• UCITS funds (OPCVM): the Organismes de Placement Collectif en Valeurs Mobilières (OPCVM — the European collective investment schemes, known as UCITS funds) allow you, with limited capital, to invest in a large number of stocks, but also in other securities. All the securities of an OPCVM are pooled in a portfolio, with a manager paid by the subscribers.
• Investing in stocks in France with ETFs: this is again a fund that replicates the performance of a group of securities belonging to a stock index or to the same sector of activity. The advantage of the ETF is that it lets you benefit from a stock’s performance without owning it, and at lower cost.
• Investing through CFDs: the Contract For Difference is a derivative, a financial security whose return depends on another security called the underlying. Thanks to CFDs, you can invest in stocks (and many other assets) without owning them. The performance of a stock CFD depends on the anticipation made by the investor about the evolution of the share’s value. In short, with CFDs, the investor anticipates the direction of the price difference of the security, or simply the direction of the price movement. It lends itself more to trading than to stock market investing, because it mainly allows you to profit from the small short- or very-short-term price movements of a security.

Which Tax Wrappers Can You Use to Invest in Stocks in France?

• The ordinary share dealing account (compte-titres ordinaire): using the share dealing account to invest in stocks from France allows you to trade all securities, whatever their nature and the financial markets they are listed on. But it is the most heavily taxed form of stock market investing, with no exemptions whatsoever.
• The PEA (Plan d’Épargne en Actions): investing in stocks with the PEA allows you to benefit from tax exemptions once the portfolio has been held for more than 5 years. But the PEA is subject to an investment cap of €150,000, and the securities you can invest in are limited to European companies.
• The PEA PME (Plan d’Épargne en Actions / Petites et Moyennes Entreprises): the PEA PME works on the same basis as the PEA (the difference being that its holder mainly invests in SMEs): tax exemption in return for directing the investment (toward SMEs) and holding it long term. The investment cap here is €75,000. It is possible to combine the PEA PME with the PEA.
• The PEA Jeunes: this PEA is reserved for young people (aged 18-25) still attached to their parents’ tax household. Its investment cap is set at €20,000.
• Investing in stocks through your life insurance (assurance vie): the capitalization of a life insurance policy (assurance vie — the French life-insurance investment wrapper) can be built with an investment that pays off in stocks, starting from a proportion of capital defined by the unit-linked funds (unités de compte).
• Investing in stocks in France through an account with a broker: online brokers offer investor accounts (alongside, or not, the options developed above) with various conditions (pricing, authorized assets, etc.). You can fund your account and use the funds to invest in stocks.

How to Invest in SMEs in France?

• Buying the shares of these SMEs directly: there is a large number of SMEs listed on the various financial markets. The investor can therefore directly acquire stakes in SMEs on the stock market. This type of investment can be very profitable, because the growth potential of an SME is high. But it is necessary to carry out analyses on these SMEs, as they are also subject to greater risk — some can go bankrupt abruptly.
• Buying stakes in SMEs through specialized funds: this solution suits those who do not want to analyze and manage their own portfolio of SME stocks themselves. By investing in a FIP (Fonds d’Investissement de Proximité, a local investment fund) or an FCPI (Fonds Commun de Placement dans l’Innovation, an innovation investment fund), you can invest in SMEs more easily and additionally benefit from tax advantages (partial exemption on capital gains).
• Putting your money into an FCPR: The FCPR (Fonds Commun de Placement à Risque, a venture capital fund) is also a fund specialized in SMEs. It differs from an FCPI or a FIP because of its international scope. Your FCPR investments also benefit from tax advantages.

SRI (ISR): How to Invest in Responsible Companies in France?

• Target companies holding the ISR label (the French label for socially responsible investment). This label distinguishes companies that, in addition to optimal fund management on the financial side, have a positive impact on the ethical side. ESG criteria (Environmental, Social and Governance) are used to award this label.
• Invest in purpose-driven companies (entreprises à mission), which include social and environmental stakes in their articles of association. The status of a purpose-driven company is governed by the Pacte law. This brings more transparency and even allows an individual investor to know whether a company meets the ESG criteria.

Stock Market Fees: How Much Does It Cost to Invest in Stocks in France?

• Brokerage fees: they pay your broker for its intermediation mission at your service: it buys and sells financial securities in your name. The securities segment and the financial markets you operate on also impact your brokerage fees. The latter are freely set by the broker, which is why they vary greatly.
• Custody fees: these charges are annualized fees that your broker bills you for the securities kept in your account. If your broker is not a traditional bank, there is little chance you will bear custody fees.
• Foreign exchange fees: these fees are automatically charged if you buy securities that are quoted in a currency different from that of your capital.
• Product fees: these fees generally exist for derivatives and structured products: ETFs, turbos, short certificates, etc. They are not communicated separately, but are built into the price of the financial security. It is necessary to read the documentation prepared by the issuer of the security for potential investors in order to spot the possible amount of these fees.
• Miscellaneous fees: other fees can increase the cost of your stock market investment. They generally depend on the general terms and conditions of the broker you use. They may include inactivity fees, market data fees, or fees tied to the use of a platform or of specialized tools for your trading.

Top 10 Rules to Follow to Invest in Stocks Successfully in France

1. Get trained and build a good financial culture
2. Choose a good broker
3. Adopt the mindset of an investor (not of a trader)
4. Focus on the long term
5. Define and implement a strategy
6. Never invest more than you are prepared to lose
7. Have patience and self-control
8. Learn from your mistakes
9. Invest first in blue-chip stocks
10. Diversify your investments

Tip 1 for Investing in Stocks in France: Get Trained and Build a Solid Financial Culture

The principle of stock market investing is to acquire a financial security that can generate wealth for you. This future flow of value is not a debt; it is uncertain. It is therefore crucial to master the principles and tools of analysis that will allow you to best assess the volume and the probability of these value flows. First of all, you need to know how the stock market works, the nomenclature of financial securities and how to analyze them. It is also important to develop your economic and financial culture: corporate portfolio management, the sectors of the economy, the internal and external factors that influence them, etc.

Tip 2 for Investing in Stocks in France: Choose a Good Broker

To invest in stocks in France, it is necessary to go through a broker. It is the intermediary between the investor and the market. Although regulated, brokerage firms have different service offerings. It is therefore important to make a good choice in order to invest in stocks in the best possible conditions. Account opening procedures, the brokerage fees charged, and the trading platforms offered are all criteria to compare.

Tip 3 for Investing in Stocks in France: Adopt the Mindset of an Investor (Not of a Trader)

To succeed in stock market investing in France, you need to use long-term strategies. The financial markets generate a great deal of value, but they are a competitive and complex environment. Having the mindset of an investor means taking all these parameters into account in a rationally built strategy, to be implemented over time. Contrary to certain widespread ideas, it is very unlikely that you will manage to make significant gains in stocks in a short time (1, 2, 3 months or even 1 year). It is mainly over the medium/long term that long term investing can be profitable.

Tip 4 for Investing in Stocks in France: Focus on the Long Term

Stock prices are volatile in the short term. Far more than over the long term, where strong trends are easier to identify. Short-term speculation is an interesting way to make quick capital gains, sometimes sizable ones. But the overall portfolio management strategy must be designed around long term investing in order to maximize the chances of growing your invested money.

Tip 5 for Investing in Stocks in France: Define and Implement a Strategy

This tip is a natural corollary of the previous one. If you have long-term return horizons, you need a matching strategy. The securities on the financial markets are numerous and the information is abundant. Without a strategy, you risk multiplying positions or investments without improving your portfolio. The type of securities, the analysis tools used, the return targets per position/investment, the money management rules to be followed at all times, the exit scenarios, etc. are all elements that can structure your strategy.

Tip 6 for Investing in Stocks From France: Never Invest More Than You Are Prepared to Lose

The individual who invests in stocks generally mobilizes part of their income or savings to build their capital. They are therefore making a real draw on their current wealth with the aim of increasing it in the end through capital gains. However, investing in stocks carries a risk of loss in capital. It is therefore recommended, even if you are well prepared and even if the profitability of your investment seems certain, to invest a sum whose loss would not be a cause of personal bankruptcy.

Tip 7 for Investing in Stocks in France: Have Patience and Self-Control

Patience and self-control are essential to the success of stock investors in France. You will no doubt encounter frustrations and perhaps failures on the financial markets, for various reasons. It is important to keep your calm in those moments and not let your emotions take over. Many traders in these situations tend to react hastily, taking on more risk or, on the contrary, protecting their position. The stock market is dynamic; self-control and patience make it possible to make choices that put you among the minority of winning investors.

Tip 8 for Investing in Stocks in France: Learn From Your Mistakes

Finding the right indicators, developing your instinct, mastering a segment of the market… These are the assets that characterize a successful investor, but they can only be obtained after making mistakes. It is by analyzing those mistakes that you can acquire the knowledge and skills that make it possible to achieve success rates above the average, or at least above your previous success rates.

Tip 9 for Investing in Stocks in France: Invest First in Blue-Chip Stocks

To build your portfolio, you should build it first with the stocks of large companies: the leaders of their sectors, the multinationals, etc. These stocks are very unlikely to suffer strong unexpected underperformance and have homogeneous growth over the medium term.

Tip 10 for Investing in Stocks in France: Diversify Your Investments

One of the most common mistakes made by beginners in stock market investing is putting all their eggs in one basket. It is better to invest in stocks across various companies from different sectors than to put all your capital into one or two high-growth technology stocks. Investing in stocks of young companies or stocks with high growth potential or whose share price fluctuates considerably is not forbidden; you simply must not invest only in this type of company. You need to diversify your investments, move toward safer stocks, stocks from different sectors or geographical zones, and even different financial assets.

How Much Should You Invest in Stocks in France?

€500, €1,000, €2,000, €5,000, €10,000, etc.? It is not possible to determine a standard sum for the capital to invest in stocks. It is of course possible to fix an amount and then elaborate an investment plan consistent with that sum.

To determine the amount you should invest in stocks, several factors must be taken into account:

• The investor’s wealth and income level: naturally, the amount you can invest in stocks depends on your wealth/income. It is a proportion of your income or of your wealth that you will be able to invest.
• The investor’s risk profile: even at equal income, not all investors will decide to place the same sum in stocks. The proportion of savings to invest in stocks or other assets on the market will vary depending on whether you are risk-averse (you invest a small share of your income in stocks) or you have a taste for risk (you then place a large part of your income in stock market assets).
• The investment strategy: the way you plan to build and manage your portfolio is linked to the amount you will invest in stocks. For example, the stocks of large international firms have high unit prices. Respecting the diversification rule will push you to mobilize a more or less large starting capital.

How to Invest in Stocks in France With a Large Budget

• Avoid investing directly in the ownership of stocks
• Ideally opt for a PEA
• Do not overlook unit-linked funds in life insurance (assurance vie)
• Avoid investing directly in the ownership of stocks

With a large amount (tens or even hundreds of thousands of euros), managing a stock portfolio will require work and/or notable management costs in order to reach an optimal profitability/risk balance. Even if you simply wish to own a volume of stocks of reputed names (like Apple), there are other vehicles to do so. What’s more, going through an ordinary share dealing account, the taxation of your capital gains will be maximal.

• Ideally opt for a PEA

Indeed, the PEA has a maximum cap of €225,000 per individual (when you hold a PEA and a PEA-PME), while benefiting from significant tax advantages. In your PEA, favor investment funds and ETFs. These solutions are more interesting, because they allow you to have a very diversified portfolio, with affordable management costs. What’s more, you have the possibility of choosing the fund to invest in: based on the performances achieved in previous years or the additional tax advantages you can obtain.

• Do not overlook unit-linked funds in life insurance (assurance vie)

Insurers also offer a good investment solution with substantial capital. They allow optimal risk management, whatever the investor profiles, notably with a combination of guaranteed-return placements and unit-linked (unités de compte) placements. These unit-linked funds allow riskier and therefore more profitable placements.

How to Start Investing With Little Money in France

To invest in stocks in France with a small budget, you need to identify investment plans that reduce management fees while allowing the diversification necessary to reduce risk.

Here are a few tips to follow to invest well in stocks with a small sum:

• The choice of broker and of the assets to invest in: choosing your broker well is important, as well as the choice of the stock market segment to invest in. Some brokers offer, for example, the possibility of investing in fractional shares (alongside whole shares and other stock market assets). Fractional shares will allow you to diversify your portfolio with little capital.
• Index funds (ETFs): these investment vehicles can allow you to reach interesting levels of returns. It is even possible to compare their performances over the previous years. These funds also allow you to reduce the management costs of the stock investor.
• Progressive investing: this solution is the most optimal if you have difficulties setting aside a large volume of savings for the stock market. There are solutions that allow you to make small, regular withdrawals from your income, in order to allocate them to stock market investing. These withdrawals can fund the unit-linked funds in your life insurance (assurance vie) or go toward investment companies.

When Should You Invest in Stocks in France?

You can invest in stocks in France at any time. As we saw previously, the stock market is a very dynamic market. It almost constantly teems with opportunities for investors. These investors put in place long-term strategies and implement them. Outside that framework, there is no specific moment to invest in stocks. Investing in stocks is not necessarily the mobilization of capital at one given moment in a series of transactions. The building of the portfolio is done progressively, while benefiting from the good long-term performance of stocks.

One can nevertheless consider the following rules to determine when to invest in stocks:

• Identify the ideal moment to buy a security: through fundamental and technical analysis, you can choose the best moment to buy a stock. It is the moment when the stock is undervalued, that is to say its intrinsic value is not fully reflected in the current price.
• Invest during stock market opening hours: it is possible to invest 24 hours a day, because on a planetary scale there is always a financial marketplace in session. But you should still know that each financial marketplace operates daily over a limited period, with opening and closing hours.

What Are the Opening Hours of the World’s Stock Exchanges in France?

• Euronext Paris – Paris Stock Exchange: from 8 a.m. to 4:30 p.m.
• Tokyo Stock Exchange: from 4 p.m. to 6 p.m., then from 8 p.m. to 10 p.m.
• LSE – London Stock Exchange: from 8 a.m. to 4:30 p.m.
• Hong Kong Stock Exchange: from 1:30 a.m. to 8 a.m.
• NASDAQ & NYSE – New York Stock Exchanges: from 2:30 p.m. to 9 p.m.
• Bombay Stock Exchange: from 3:45 a.m. to 10 a.m.

Should You Invest in Stocks in France After a Stock Market Crash?

Yes, it is possible to invest after a crash or at the beginning of a recession period. But this exercise requires a minimum of skill in financial analysis to produce good results. As a principle, a low entry point optimizes the potential profitability of a position, and in times of crisis, the value of the stock market falls. Only, you must be able to identify under what conditions that future capital gain can be realized.

How to Invest in Stocks in France After a Crisis or a Stock Market Crash

• Be prepared to hold over the long term: it is possible to acquire stocks that suffered a heavy discount in times of crisis. Only, it is difficult to know with exactness the moment of the recovery, nor even whether the stocks acquired will rise again directly. The amount to invest in a crisis period must be such that the investor can bear having it tied up at least over the medium term.
• Do stock picking: the choice of the securities to acquire after a crash, within the market cycle, is of crucial importance. You must make sure that the characteristics of the stock will allow it to rebound once the crisis has passed. It may for example be high-value stocks that are simply impacted by market sentiment. One can also, in times of crisis or after that crisis, acquire the stocks directly linked to the economic drivers of the crisis, if the latter belongs to a cyclical sector. But you must always make sure that the fundamentals of the stock have not been called into question by the crisis.

Should You Invest in Stocks in France When the Markets Are at Their Highest?

Yes, based on solid financial analyses. In a way, the approach of investing in stocks when the markets are high is comparable to that of crisis periods: restraint and in-depth analyses in order to prepare to draw maximum profit from the inevitable reversal of trend to come. Indeed, “bubbles” (periods of stock market boom) often precede crashes in a structural cycle.

How to Invest in the French Stock Market When the Markets Are at Their Highest

• Carry out an in-depth financial analysis of the potential companies to invest in: a stock with a high value, but with a very high debt ratio, carries additional risks. You must avoid this type of company, because in the event of a reversal of the market trend they will be more impacted than the others.
• Analyze the companies’ business models well: in times of market boom, a discriminating criterion can be the business model. Opt for companies with proven business models, rather than for companies that are too young or disruptive, notably those that have just been listed on the stock exchange.
• Secure your capital gains: this is an important measure to take when the markets are bullish. Your portfolio then holds several stocks with large potential capital gains. Raising your stop loss levels will ensure that in the event of a reversal of the market trend, you exit the market quickly and cash in your gains.
• Invest in funds: you can invest regularly in funds, notably reputable ETFs, for example through the stock broker. If the bullish market trend becomes durably established, this will allow you to easily profit from the performances of the main stocks.

Should You Invest in Stocks in France?

Yes, you should invest, and for several reasons. It is reasonable to anticipate the exit from the health crisis linked to the novel coronavirus. If that is the case, growth and consumption in several countries will keep improving. The monetary authorities could accompany this movement with incentives in terms of monetary policy. In general, recovery phases are marked by strong increases in stock values in relative terms over the medium term. It therefore undoubtedly represents the best moment to position yourself and take advantage of this ascending wave.

What Should You Invest In on the Stock Market in France?

• Stocks of the luxury sector : for more than a decade now, this is a sector that has grown continuously, withstanding every financial crisis. This will still be the case, as luxury keeps conquering new markets.
• Investing in commodities : in inflationary periods like the one we are going through, the stocks of the commodities sector move upward, like those of most basic resources.
• Stocks of the health sector : this sector is also among those least sensitive to the economic climate. But in the current context of a health crisis, the stocks of the large companies of the health sector will keep climbing with the growing demand for products linked to the fight against the pandemic.
• Tech stocks : like luxury, technology is a sector in permanent growth for more than 10 years. What’s more, like health, it benefits from the current crisis, with the need to push even further the digitalization of certain processes and businesses. Thus, if you are looking for what to invest in, note that the technology sector is a very attractive sector for stock market investors.
• Bonds : even if the emergence of different COVID-19 variants still constitutes a source of concern, it seems accepted that we are in a phase of decline of the health peril. If the exit from the crisis is underway, an evolution of economic policy is likely, with rates more attractive for bonds.

How to Protect Your Stock Portfolio in Your Absence?

• Diversify your investments: this is the most effective way to manage risk and protect your portfolio. It means increasing the number of types of securities held or the number of categories of one same type of security. One can therefore for example invest in stocks in France in stocks of various sectors of activity and of different geographical zones.
• Part with risky securities: the speculative instruments in your portfolio as well as the stocks that are at risk of a downward trend in the short term can be liquidated.
• Set up stop levels: this measure will allow you to protect yourself from unfavorable market reversals in your absence. Depending on the possibilities offered by your broker, you will be able to indicate stop loss or trailing stop limits on certain of your positions. If the price of the asset reaches that limit, your position is automatically closed (you automatically exit the investment) and this spares you heavy losses.
• Invest in hedging derivatives: buying hedging derivatives is also a good way to protect your portfolio. A CFD for example will allow you to benefit from the variation of the price, even if that variation goes against you regarding your underlying asset.

How to Invest in Stocks in France in Times of COVID-19

• Keep your calm and avoid panic: the current crisis was characterized by its unexpected, unprecedented, violent and global nature. It therefore naturally triggered several waves of panic. Even if it seems the worst is over, the markets remain quite wary and the slightest piece of information can trigger disproportionate reactions. By staying serene, you will have the opportunity to make better arbitrage decisions.
• Stay tuned to the news: in this phase of the health crisis, information monitoring is crucial. Given the global nature of the COVID-19 crisis, the markets are very sensitive to the news. You must be able to get the information as fast as possible in order to analyze it and anticipate its potential impact on your portfolio. This monitoring is also essential for short-term traders who want to take advantage of the market’s relative volatility to land winning trades.
• Strengthen your positions in long-term strategies: synthetic securities like ETFs or indices are often held over long horizons. The current crisis has pulled down significantly some of these indices. It is possible to make acquisitions in this segment while waiting for the recovery.

Why Invest in the Stock Market in France?

• Support the economy: the investor who buys a stock makes additional funds available to the issuing company. The latter can be useful for the development of the company through several forms of investment. Investing in stocks is therefore a way of supporting the development of the sectors of the economy of your choice.
• Diversify your assets/investments: stock market placements also offer the possibility of diversifying the assets of your wealth. For example, if you have already invested in real estate, the acquisition of stocks allows you to carry out a good diversification of your investments, with the advantage of a more liquid asset.
• Fund your life projects: the realization of personal projects requires mobilizing relatively substantial capital, and your monthly income does not always allow you to get there. Investing part of your savings in stocks is a good way to get there, from the potential capital gains generated.
• Benefit from attractive returns: among the placements offered by financial institutions, bank placements still occupy an important place in household savings. But the fall in rates makes these options less and less attractive. Investing in stocks becomes a way of benefiting from more attractive returns on your placements.
• Prepare for retirement: retirement is a delicate moment on the financial level. In the absence of income, the standard of living can drop considerably. Whatever your number of contribution years or your scheme, it is always useful to have a supplement. The unit-linked funds in a life insurance policy (assurance vie), or placements in funds or stocks, are ways to prepare for your retirement and probably benefit from additional income at the time of that retirement.

What Is the Best Moment to Invest in Stocks in France?

• When the stock’s P/E ratio is low: if you are targeting a stock in particular, the best moment to acquire it is when its P/E is low. The Price Earnings Ratio (PER) is the ratio of a stock’s price to its earnings. The lower it is, the more promising the acquisition is in terms of capital gains.
• When the market is low: if you are not a speculator, it is interesting to invest in stocks in France when the market is relatively low. Indices such as the CAC 40 or the FTSE will allow you to identify those moments. By observing the historical evolution of these indices, you will be able to identify a consolidation cycle and position yourself at the beginning of ascending phases.
• In periods of low price volatility: it is better not to invest in stocks in France in periods of high volatility. It will be more difficult to arrive at relevant analyses in such a period.
• When you have a stable financial situation: it is better to invest in stocks at a moment when your financial situation is stable, a moment when you have consistent savings and certain income over the medium term. Otherwise, the risks of making irrational decisions will be higher.

Should You Invest in Stocks in France With a PEA or a CTO?

Both options have their advantages; the decision depends on the constraints and the interests of the investor. The PEA is ideal for those who want to invest important sums and whose concern is to reduce the impact of taxation on their capital gains. The ordinary share dealing account (compte-titres ordinaire, CTO) has the advantage of being able to receive securities and stocks from outside Europe; you can therefore put into it stocks of large American multinationals or from other continents that have high-quality fundamentals.

Investing in Stocks in France: What Is the Difference Between a Stock and a Bond?

The stock is a financial security listed on the stock exchange. Here are its characteristics:

• It is issued by a company, and represents a share of the share capital.
• A stock gives a right of oversight and of participation in the governance of the company that issued it.
• It gives the right to variable income called dividends, distributed semi-annually or annually. The amount of the dividends depends on the company’s results and on the distribution decided by the board of directors.
• A stock has no term. It exists as long as the issuing company exists.

The bond is also a listed financial security, but with different characteristics, which are as follows:

• It is issued by a company or a State and represents a debt.
• The bond does not confer any right linked to the governance of the issuing entity.
• The income drawn by the investor from the bond is fixed from the issuance of the bond. It is a repayment of the nominal amount of the bond, regular, plus interest.
• The bond has a defined term.

How to Invest in Stocks for Beginners

Stock market investing for beginners, or for those who do not know much about it, necessarily goes through prior training. If you have the project of investing in stocks and if you do not yet understand how it works, you can already start by reading this article in full, then check out our other guides on stock market investing or else follow a short course. Afterwards, you can start with a demo account, then start investing progressively while improving your knowledge and skills.

How Much Can Stock Market Investing in France Earn?

• There are disparities in returns depending on the financial instruments used to invest. Direct stock market investing by trading stocks offers fairly volatile returns for individual investors.
• On the other hand, by going through insurance contracts or equity funds, you can have a more precise idea of what you can earn each year. For example, the Jupiter Dynamic Bond fund has a 5-year performance of around 10%.
• Even if some statistics can present an average annual return of stocks on certain marketplaces (the American S&P 500 offers on average 8% to 11% per year over the last 100 years), the standard deviation remains very large. There is therefore a great chance that next year an investor on that index will gain 26% or that he will lose 14%.
• The return of stock market investing therefore depends on the years, on the skills of the investor, or on the investment vehicle used.
• Also, what the stock market can earn you depends on the amount invested and on the quality of your financial placement.
• As we can see with legendary cases like Warren Buffet, it is your ability to implement good long-term strategies and to anticipate the trends of the markets that determines the extent of your capital gains.

How to Invest in Stocks in France Easily While Limiting the Risks

• Choose a good tax wrapper: inform yourself and choose the wrapper that suits you. Do not limit yourself to the PEA, CTO and the like; also consider the very flexible and advantageous option of investment accounts with brokers.
• Eliminate the fees: take brokerage fees and miscellaneous fees into account in the calculation of your return.
• Diversify your placements: invest in stocks of companies from different sectors, on varied financial marketplaces or geographical zones.
• Invest with ETFs (maximum diversification and reduced fees) : acquiring a share of an ETF is an optimal way of diversifying your placements and reducing your risk and your fees.
• Respect your investor profile: Your degree of risk aversion must be taken into account in the constitution of your stock portfolio and in the elaboration of your investment strategy.
• Invest as early as possible: your capacity of analysis and of progress is good when you start early, as is the volume of capital you can mobilize over the medium term for risky placements.
• Invest progressively: start with small placements and evolve in keeping with your performances.
• Think long term: when you plan your investments and your future returns, having a long time horizon increases your chances of reaching your objectives.
• Master your emotions: even if you are subjected to stressful situations, keep your calm as well as you can, in order to make clear-sighted choices.

With What Sum Should You Start Investing in Stocks in France?

• You can invest in stocks with at least €100. You just need enough to buy a few securities, especially if you are a beginner. In any case, an acceptable minimum to get started is €1,000.
• €5,000 constitutes the sum best suited to start investing in stocks. Indeed, such a capital already allows having a minimum of portfolio diversification and setting up a medium-term strategy with attractive returns.
• With a sum below €10,000 (and above €5,000), you can better diversify your portfolio and above all go through the funds and the ETFs. These vehicles are synthetic and offer optimal diversification at lower cost.
• Investing €10,000 and more is ideal for directly acquiring stocks for buy and hold strategies, since it allows acquiring enough stocks and benefiting from a considerable capital gain even for small increases in the value of those stocks. What’s more, it gives more possibilities of diversification.

Why Should You Invest in Stocks in France as Quickly as Possible?

• The first advantage of a quick investment is the duration of the placements. Indeed, time is an important factor in investments. At equal return and equal capital, the one who has the longest investment duration naturally has the most money.
• Starting to invest early can allow you to enjoy a big nest egg for your retirement or your life projects, this without having had to mobilize too large an initial capital. This is all the more true since in stocks you can invest progressively and capitalize your interest.
• The second advantage of investing in stocks quickly or very early is the reduction of risk. It is established that the profitability of stocks is more certain over the medium or even long term. But crises and stock market crashes occur cyclically, though with difficulty predictable. They are characterized by enormous losses of value on the markets.
• Those who invest early in stocks have a high holding duration of stocks and their exposure to the negative consequences of crises is lower in weighting. They therefore obtain a better return.

What Should You Know Before Investing in Stocks in France?

• Know how the main financial products work, how the stock market works in general, and your own investor profile (what degree of risk you can bear, how you approach risk, etc.).
• Determine the relative share of your wealth that you are going to invest, in order to master the risk taken.
• Master the risk structure of the financial products you are going to invest in, especially if they are derivatives or optional products.
• Inform yourself well about the companies whose stocks you wish to acquire (history, management, news, returns, vision, projects, etc.) or about the funds in which you wish to invest in stocks.

How to Buy Stocks on the Stock Market From France

1. Select an intermediary (broker or bank): you must always go through a bank or a stock broker to invest in stocks in France. Choose your intermediary according to several criteria: reliability, brokerage fees, range of assets offered, etc.
2. Choose an investment support: there are several of them, which vary according to the types of securities they can host, the type of financial institutions that manage them and the taxation applied to them. The supports or investment accounts offered by brokers have the advantage of being more flexible, allowing you to invest in almost all stock market assets at minimal fees.
3. Identify one or more stocks: there are thousands of stocks available on the financial markets, with an international nomenclature (ISIN code) to identify them. However, it is not really these stocks that you should identify and analyze, but the companies that issue them.
4. Place a buy order: once you have identified the stock to acquire, you must place a buy order. In short, you simply need to choose your security on the broker’s platform, then click on “Buy”, “Purchase” or “Invest”. A window appears and allows you to configure your buy order: amount to invest or quantity of securities to acquire, payment method, risk management options, etc.

Once the buy order has been placed, your broker gives you a trade confirmation, or else you receive the details of the transaction in your account or on the broker’s platform. From then on, you will be able to track the evolution of your stocks and implement your strategy.

How to Place an Order on the Stock Market in France

1. Search for the asset to invest in, in the list of securities accessible at your broker, or in the list of securities of your portfolio if you plan to exit a security that already appears in your portfolio.
2. Choose the direction of the order to place. When you click on the security, you get details as well as the “Buy” options (Invest, buy order) and “Sell” (Exit, sell order).
3. Set the order parameters. In the window that appears after you have clicked on “Buy”, for example, you must indicate in the boxes provided for this purpose the amount you wish to invest or the quantity of securities to buy, the payment method to use, the order type (market order, limit order, etc.), etc. The parameters to indicate are fewer in the case where you wish to close a position (exit the investment, sell what you previously bought, or buy back what you previously sold if you had taken a position on the downside).
4. Check and validate the order. A validation button is available at the end of the order configuration window. By clicking on it, a summary is displayed. It offers the possibility to definitively confirm the order or to go back to the previous screen to modify it.

Investing in Stocks in France: What Is the SRD For?

The Service de Règlement et Différé (SRD) is a deferred settlement service offered by certain brokers that allows orders to be executed on credit. Concretely, it allows the payment of the acquired assets to be postponed to the end of the trading month (in the case of a purchase: the broker pays first on behalf of the investor, and the latter reimburses at the end of the trading month) or the collection of the proceeds of the sale of those assets to be postponed (in the case of a sale, the broker collects first and pays the investor afterwards).

The financial intermediary therefore stands in for its client, by executing the order without the latter impacting the trader’s account. Specific fees are added by the broker for this service (logically).

The point of the SRD is to be able to expand the financial capacity of the investor, who can invest even when he does not have the required capital at the moment of investing.

By its operating principle, the SRD allows the investor to:

• Benefit from leverage: it is generally 1:5 at the most (5 times the capital to be committed to a position). For example, with €1,000 you can make a €5,000 investment.
• Carry out short sales: place a sell order on a security that you do not own, but whose price you think will fall (if its price falls, it is profitable to sell it and to buy it back when its price will be even lower. On the other hand, by buying it while its price falls or will fall in the future, one can only realize losses).
• Settle your transactions later: this is the basic purpose of this service, which allows for example buying stocks now and paying the amount of this acquisition at the end of the trading month (an extension of the deadline is possible depending on the brokers).

What Tax Must You Pay on Stock Market Gains in France?

• Since 2018, dividends and gains (capital gains on the sale of stock market assets) are subject to a 30% tax representing the PFU (Prélèvement Forfaitaire Unique, the French flat tax).
• The investor can also opt for the taxation of his gains under the income tax schedule.
• For dividends, a taxation under the income tax schedule includes a 40% allowance and the deductibility of a part of the Contribution Sociale Généralisée (CSG).*
• For gains or capital gains on the sale of assets, if the assets in question were acquired before 2018, then the taxpayer benefits from a 50% to 85% allowance on his gains before application of the schedule.
• The 30% PFU is a global tax, which is in reality made up of 17.2% in social contributions and 12.8% in actual tax.

Putting Money in Stocks – Learning How the Stock Market Works to Invest

• Putting money in stocks – What is the stock market? : The stock market is a financial market on which investors finance companies or States that need financing. For the proper functioning of the online stock market, the category of players looking for financing creates the supply while the agents with a financing capacity represent the demand.
• The products of the stock market : To satisfy the demand, companies and public States issue financial assets. Thus, the demanders (investors) buy one or more products at a determined cost in order to put money in stocks. That amount depends on the current situation of the market. But in principle, when the demand is higher than the supply, the price of the assets rises and in the opposite case, the price falls.
• The financial assets for putting money in stocks: A financial asset or marketable security is a tradable and transferable financial security or contract likely to generate income or capital gains for its holder. It is in reality an intangible asset that takes on a monetary nature. The financial asset is also a financial fixed asset that belongs to a company over a relatively short or long period. When they are not intended for long-term use, these are current financial assets.
• Putting money in stocks : Putting money in stocks means acquiring equity securities, that is to say shares of the capital of a company, with the aim of receiving a dividend. It can allow you to take part in the general meetings and in the decision-making within the company. That is moreover the reason why stock market investors are said to be owners of a part of the portfolio of the issuing company.

Putting Money in Stocks – Tools for Putting Money Into Stocks

To put money in stocks, you must first of all select an investment mode or a type of account on which to host your financial assets. These are the tax wrappers. Among the three solutions of the market, we distinguish:

• The Plan d’Épargne en Actions or PEA : The PEA is a type of account that allows you to benefit from advantageous taxation. It corresponds to a complete tax exemption after 5 years of holding your returns on investment.
• Life insurance (assurance vie): By opting for life insurance (assurance vie) as a tax wrapper, you can put money in stocks online and escape the taxation on your gains after eight years of holding, or benefit from an advantageous tax regime on your capital upon inheritance.
• The share dealing accounts (comptes-titres): The share dealing accounts constitute the most flexible investment mode of the stock market. They allow betting on almost all financial assets with leverage.

Putting Money in Stocks – Which Tax Wrapper to Choose in France?

The choice of the tax wrapper for putting money in stocks rests on the goals of each investor. Indeed, each investment formula presents advantages and disadvantages that influence the taxation on the income of your placement. It also determines the flexibility of the investment; that is to say the capacity to bet on one or more stock market products.

Advantages and Drawbacks of the Tax Wrappers

• The PEA : Although it offers a more advantageous taxation, the PEA restricts the choice of investment solutions to European stocks, the listed index funds or Exchange-Traded Fund (ETFs) and the funds in European stocks. When you make a withdrawal before the deadline of 5 years of holding, the PEA account is systematically closed. Also, it is impossible to deposit more than 150,000 euros into this tax wrapper to put money in stocks.
• The share dealing account : If you opt for the flexibility of the share dealing account to bet on different supports, then your income undergoes 30% taxation. Indeed, it is the taxation of capital income, including the social contributions, that applies in this investment regime. Nevertheless, the investor can short stocks on the market or buy commodities or sell short to bet on falling prices.
• Life insurance (assurance vie) : In addition to guaranteeing a better taxation on income, this tax wrapper allows making withdrawals during the first 8 years. It also gives access to various investment supports like international ETFs, stocks, bonds, etc.

From all this, we can say that life insurance (assurance vie) remains the best investment option for putting money in stocks if you are a beginner. It remains a universal investment mode favoring access to a diversified range of investment supports. Also, it allows controlling the risk-taking over the long term or the medium term. If you prefer the significant volatility of financial assets and a placement over a duration longer than 10 years, the PEA remains however an excellent choice. And when you hold these two tax wrappers, open a share dealing account if you wish to take advantage of the leverage effects or to invest in alternative assets.

Who Are the Investors Who Can Put Money in Stocks?

Anyone who has capital to invest can put money in stocks. This can be private individuals, legal entities and the public authorities able to bring part of the financing on the financial markets. However, the category of institutional investors, made up of insurers, banks, pension funds, investment funds, etc., represents the biggest investors in the stock market.

The Investment Supports on Which to Put Money in Stocks

Besides the determination of the tax wrapper, the choice of the investment supports constitutes one of the important steps for putting money in stocks. Indeed, you can buy on the stock markets:

1. Individual stocks: these ownership securities are issued by joint-stock companies like Peugeot, Apple, Amazon, etc.
2. Exchange-Traded Fund (ETF), also called trackers
3. Baskets of stocks of professional investment structures like the FCPs, the OPCVMs (UCITS funds) or the SICAVs.

The Best Support for a Beginner

If you are a beginner investor and wish to put money in stocks, ETFs are the financial assets suited to your level. Indeed, trackers are diversified supports and they cost less on the stock market. Investing in this type of product allows holding hundreds of stocks with one ETF. Here, the Exchange-Traded Fund distributes your invested capital according to the size of the companies that make up the support. As a result, the beginner reduces his risk of making a selection mistake.

On the other hand, numerous studies reveal that ETFs are the best-performing financial assets of the stock market. Invest in investment funds and individual stocks later, when you will have more mastery.

The Types of Financial Assets to Favor on the Stock Market

There are different financial assets on which to put money in stocks. Each of them is characterized by a specific mode of operation that determines the advantages of the holder or of the investor.

• The financial fixed assets which can be:

1. A stock or an ownership security issued by a joint-stock company that needs financing. Stocks give the right to vote at the general meetings and to receive a dividend calculated at the end of the year on the basis of the results of the company.
2. A bond or a debt security issued by a State or a large company. It is a loan contracted from investors on the financial markets. Holding a bond means lending money to a public or private institution in order to receive annual interests called coupons.

• The marketable securities: an investor can put money in stocks on a marketable security that represents shares held by a société d’investissement à capital variable (SICAV) or by a collective investment scheme (OPCVM). In other words, you hold the fraction of a portfolio of stocks of a SICAV or of an equity fund (FCP).
• Other forms of financial fixed assets : loans, guarantee deposits, sureties, receivables attached to equity participations… are other variants of financial fixed assets on which the investor can put money in stocks online.

The Selection of the Right Broker for Putting Money in Stocks

• What is a broker : The stock broker or the broker plays an intermediary role between the investor and the financial markets. In reality, he executes the orders issued by his investors to buy or sell financial assets. These orders are called the stock orders.
• The role of the broker : To execute the orders of his investors, the broker creates and makes available a channel allowing buyers to take positions on the financial supports. The support of interaction between these actors can be a website for putting money in stocks. Also, the broker is in charge of keeping the chosen financial assets in the tax wrapper that you have opened with him.
• Choosing the ideal broker: The best stock broker must have an execution license and an authorization to operate in France.
• Putting money in stocks – best broker for beginners : For the first investments, prefer a managed life insurance policy (assurance vie). Indeed, this managed mode is the ideal means to grow your wealth while limiting the risk-taking. This recourse allows entrusting the choice and the management of the ETFs to a professional. Thus, the manager of your tax wrapper combines bond or stock trackers with a capital-guaranteed fund.

The Types of Brokers for Putting Money in Stocks

• Putting money in stocks with traditional banks: A traditional bank is called a branch-network bank possessing physical agencies. These financial institutions allow their clients to put money in stocks via various financial wrappers. However, the offer of these institutions in terms of stock markets is generally reduced for the assets listed on Euronext Paris. Likewise, the traditional bank only provides the interface for placing orders in order to support retail investors.
• The online banks for putting money in stocks: The online banks position themselves as brokers, since they offer a stock brokerage offer to put money in stocks online. With this type of broker, a savings client has access to the stock markets by choosing his tax wrapper. You also benefit from a mobile platform (on computer and on smartphone) to place investment orders on numerous assets.
• Putting money in stocks with online stock brokers : The online stock brokers work exclusively in the brokerage activity via the internet. These institutions offer you to bet on a large number of supports present on various stock markets. Also, the flexibility of these brokerage firms allows doing the deferred settlement service (SRD) and taking advantage of numerous developed derivative products. By opting for the online stock brokers, you benefit from lessons on the functioning of the stock market, market updates…

Among these brokers of the stock market, the online stock brokers Vantage FX and AvaTrade remain the best brokerage agencies to favor. They offer a complete brokerage service including training courses and information about the stock market. Also, these institutions charge less for their service compared to the other brokers that propose an aggressive pricing policy.

Putting Money in Stocks – Refining Your Investment Plan in Stocks

• Open a PEA wrapper : When you have a good mastery of ETF investing in life insurance (assurance vie), then develop your investment strategy by opening a PEA account. By betting with this tax wrapper, you benefit from various advantages on the taxation of income. However, the risk-taking for putting money in stocks increases with this account.
• Combine Life insurance and PEA: The stock placement in a PEA means investing in individual stocks; hence your investment becomes riskier. Opt then for the diversification of the portfolio by betting on ETFs and by choosing the best financial indices on the stock market. To put money in stocks, the ideal solution is to avoid the CAC 40 trackers and to bet on the index:

1. S&P 500,
2. Stoxx 600,
3. MSCI World,
4. MSCI Emerging Markets…

• The PEA and Life insurance in free or managed mode : If you wish to expose your wealth less to the markets of individual stocks, opt for the combination of PEA and managed Life insurance. With the free management option in Life insurance (assurance vie), choose bond ETFs and the capital-guaranteed fund to balance the increases on your overall financial estate. In this category, it is recommended to favor the trackers

1. Indexed on inflation,
2. Of American companies,
3. Of European companies and
4. Of bonds with a high yield.

Increase Your Risk-Taking to Put Money in Stocks

• Open a share dealing account : The opening of a share dealing account allows going further in terms of return on investment, but also in terms of risk-taking. This choice of fluctuations is made when you have the life insurance account and a well-stocked PEA account. The advantage of the share dealing account is the flexibility of investment and the leverage effect.
• Putting money in stocks with leverage : On the stock market, the leverage effect is a mechanism that allows multiplying the profits and the losses of your placements. This mechanism allows you to invest beyond the initial amount staked. In principle, it is a matter of multiplying your money up to 2, 3 or 10 times. Thus, when your investment generates profits or a loss, the gain or the deficit is multiplied by the leverage effect.
• The investment supports with leverage: Many financial assets on which to put money in stocks allow taking advantage of a leverage effect. These are in general debt-based purchases, derivatives, certain trackers and long-term assets.
• Diversify your financial assets : The share dealing account allows shorting the stock market by further diversifying your portfolio of financial assets. If you do not know what to invest in, we advise you to place your money on the commodities. By betting on gold, you choose a safe haven value to attenuate the effects stemming from the fall of the stock markets. What’s more, investing in oil is a shrewd placement, because this fossil fuel is becoming scarcer and scarcer.

Putting Money in Stocks – The Ideal Budget for Putting Money in Stocks?

• The level of exposure of the budget: A good investor must define the exposure level of his financial portfolio in order to put money in stocks. For a beginner, the threshold of money that it is advised to stake is 5% of your portfolio or of the money you have. The most successful and the most skillful investors can expose up to 30%, or even more, of their wealth in stocks.
• The horizon of the investment for putting money in stocks: The investment budget must take into account the duration of your placement of money. The ideal choice is the financing over the long term. Also, define the budget according to your aversion to risk.
• Respect of the imposed budget limit : a good investor respects the investment budget. To do so, it is inadvisable to consult every day the price of the assets you have chosen. Because, the regular observation of the portfolio or of the dashboard can lead you to take a bad decision.

Putting Money in Stocks – How to Invest and Win on the Stock Market Over the Long Term?

• Develop the profile of a good shareholder to put money in stocks: To succeed on the stock market and to make money on your investments, one must develop the profile of a good shareholder. It is not all about choosing your tax wrapper and the financial assets, but also about having habits that lead to generating good returns on investment.
• Use the right investment tools in order to put money in stocks well: On the stock market, the first tool to choose is the investment account. The best strategy for placing money is to use the wrappers progressively in order to combine later all the investment options. To that end, choose the best life insurance (assurance vie), the best PEA account and the best share dealing account. Each tool presents its advantages and its disadvantages. Nevertheless, their combination allows succeeding on the stock market over the long term.

Putting Money in Stocks – The Advantages of Diversifying the Financial Supports

• Putting money in stocks – An uncertain forecast on the financial assets : The humility of a good investor allows him to recognize that it is difficult, even impossible, to predict the variations of an asset on the market. Thus, the uncertainty about the rise or the fall does not allow anticipating with exactness the direction of the movements. Because, there is a multitude of unpredictable parameters to consider.
• Progressive and scheduled investing : Facing the uncertainty of the stock markets, the ideal solution is the Dollar Cost Averaging (DCA) method. It consists of spreading your financing over an average period of 6 to 12 months with a view to reaching your investment budget. Then, keep investing in a monthly or quarterly way, or else invest the whole budget in a single operation.
• Attenuation of the big losses : The unpredictability of market timing is the main reason that justifies the diversification of the financial supports. Indeed, placing your wealth on several assets avoids losing all your money on a single bad placement. Thus, attenuate the big losses by investing a handful of your budget in each financial instrument.

Putting Money in Stocks – Planning the Investment Strategy in Stocks

• Cold blood: To put money in stocks online, panic is not your best ally. Indeed, the most important advice to remember is to keep your cool in the face of the downward trends of the market. Because it happens that the curve of your investment falls and when you panic, you withdraw your money. In general, the withdrawal in those periods is a mistake, since your placement is beneficial over the long term.
• The rise that follows the downward trend : In principle, the fall in the performances of a financial asset indicates a potential spectacular rise. Thus, when you withdraw your money after the fall, you crystallize the loss and miss the next upward trend.

This article has an educational purpose and does not constitute investment advice. Investing in stocks carries a risk of loss in capital.