Stock market investing in Germany for dummies

41 posts in this topic

Dida.de say they charge 0 euro for the year.

 

Anyone think they are expensive / cheap ?

 

Service seems good to me :)

Very clear interface, of course I will swap, if someone recommends a cheaper service or better one

 

One thing I do not like, is there seems to be a limited selling options, compared to the UK for example if I want to sell 800 shares, there seems to be relatively small number of offers, like I can sell 400 or 600 - in the UK I could always sell the number I wanted to. I guess this is due to the euro market being smaller than the UK  market and therefore not so many offers available - so not really bad on Diba

 

Any thoughts

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It looks like a good overview for a reader who has never invested in stocks before and would like to give it a try.  Probably very much geared to the American reader trading on the US markets. Investing here means different tax rules, trading platforms, fees etc.

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If you are a US citizen, you probably don't want to buy ETFs that are not domiciled in the US due to PFIC: https://www.taxesforexpats.com/guides/passive-foreign-investment-company-8621.html

 

Since we're EU residents, we can't really buy ETFs that are not domiciled in the EU due to MiFID (no EU-mandated customer disclosure statements), unless we are categorized as "professional investors": https://usexpatinvesting.com/educational-materials-for-ex-pats/are-you-kiding-me-priips-kids-and-new-obstacles-for-americans-buying-etfs-in-the-eu

 

Up until this month, I was able to buy US-domiciled ETFs with my Schwab International account (USD, taxable). They have to stop letting us do that after 19 September 2019: https://www.americanexpatfinance.com/news/item/231-charles-schwab-unveils-mifid-ii-related-changes-to-etfs-for-europe

 

I've started writing scripts to make a "DIY" S&P 500 mini-index for varying amounts of investment, but since all I really want is the ability to keep buying those index ETFs, passing the Series 65 so I can call myself a Registered Investment Advisor (even though I'm the only one I'll be advising!) the next time I'm back home might be a better long-term solution: https://www.investopedia.com/articles/professionals/041013/becoming-registered-investment-advisor.asp

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Does any one use Revolut for trading  https://www.revolut.com/de-DE/legal/trading ?


I just got an email from them that they now offer trading on standard accounts and the terms looks quite nice.

 

I have couple of questions:

 

1. They are UK based company. Is there any tax implication I need to consider? I heard that if you open trading account with German vendors like DB you don't need to do any additional paperwork for tax purpose. 

If I buy stocks from the revolut app, I think there would be some way to get a PDF details of purchase/sale and send it to Tax Consultant

 

2. Right now they say that I can buy stocks in US market. Not sure what do I need to buy stocks from DAX?

 

Revolut looks good and easy to use as I can just get started from there app and its in English. Last week I opened another account in Consors bank but it involves too much of paper work. I had some query and I wrote an email to them and they replied back asking me to write in German. 

 

This is what I got from Revolut and looks quite promising:

 

Last month, we made stock trading available to our Metal customers, enabling them to buy and sell U.S. stocks directly from the Revolut app. The launch of our trading feature was a success, and now we’re excited to offer it to our Standard customers as well.
You now have access to trading
 
As a Standard customer, you’ll be able to make 3 commission-free trades per month. Any trades thereafter will be charged at 1 EUR per trade. We’ll also charge a 0.01% annual custody fee, based on the value of your portfolio.
How trading works
 

Fractional shares

Often, investors are required to buy a minimum of one share in a company. That’s not a problem if the cost of a single share is low, but shares in many popular companies, such as Amazon, can be a thousand dollars each, or more. With fractional shares, you can buy a fraction of a single share for as little as $1, which means you’ll still own a piece of the company, albeit a much smaller one.

Instant market orders

Market orders allow you to buy or sell a share, or a fractional share, at its current market value. For example, if the cost of a single share in General Mills is $1.50 (hypothetically), when your order arrives at the market, you’ll usually pay $1.50 for that share.

Want more commission-free trades?

If you’d like to increase the number of commission-free trades you can make each month from 3 to 8, consider upgrading your plan to Premium. Upgrade to Metal, and you’ll get unlimited commission-free trades per month.
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Revolut is a cool app, and I have used it on trips abroad (US, UK; Croatia, Sweden) and really works well.

I also saw that the trading function is available for standard users and was amazed how easy this looks to be.

I am considering using it for trading shares, but have some concerns that have prevented me for diving in immediately:

Revolut are in the UK...so what happens after a no deal brexit? They say that they have already secured a european banking licence but in some cases a person eg. living and banking in Germany will need to show german nationality documents.

It could also be that post-brexit, the money transfer to and from Revolut froman EU account incurs charges. Finally (and of most concern) is that they are not covered by the usual safeguards:  "Unfortunately, the law doesn't allow us to pay you interest, and the money in your account isn't covered by the Financial Services Compensation Scheme."

What do you think? Since I would be most interested in buy-and-hold, the lack of security is a bit worrying...

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On 3/9/2020, 2:36:00, Cestrian said:

Hi guys,

Anyone used Trade Republic?

https://www.biallo.de/depot-vergleich/#

I've not traded in shares before but am thinking about buying whilst the prices are low.

Any advice?

 

 

I'm using it and, in itself, it's great.

In a sense it's a victim of its own success - the account opening and registration part can be lengthy and, at times, frustrating. Lots of people in line, it appears...

But all in all it was well worth it!

Good idea to buy now or in the near future - way to go.

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Thanks! I registered with it this evening. Lots of people in the line but it only took 7 minutes for my turn.

i figure that with the current climate and shares plummeting now would be a great time to buy. Once the situation improves the prices should revert back to normal again, resulting in a healthy profit.  Obviously it means waiting it out but that’s ok.

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Nice, let us know how it went!

I agree it seems like a good time to buy. The only caveat, in my view, is: we should not assume the market has bottomed out just yet.

Personally, I'm buying something now and if (when?) prices drop further I'll buy some more. The way I see it, the "average down" approach is a sound one as long as you're paying some attention to what you're buying and dividend-paying ETFs seem like a good choice to me in this regard. Just my 2 cents.

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timing of the markets is something that most of the times for most of the people does not work. Therefore time IN the markets is so much more important.
While a little bit of fun and speculation can be a nice thing, please make sure that you have an overall balanced and fitting-to-you-personally set up an investment strategy for the long run. Where buy-and-hold is the main parameter to follow for good success.

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
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1 hour ago, Starshollow said:

timing of the markets is something that most of the times for most of the people does not work. Therefore time IN the markets is so much more important

 

So true. This is very well put.

 

 

 

1 hour ago, Starshollow said:

While a little bit of fun and speculation can be a nice thing,

 

Right, I didn't specify it earlier in the Trade Republic discussion with @Cestrian but I'm not currently using that to manage my life savings. More of a day trading/medium term investment tool on a "hobby" level. Managed to make some gains without spending weeks analyzing balance sheets :).

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On 3/10/2020, 2:57:18, ale83 said:

 

I'm using it and, in itself, it's great.

In a sense it's a victim of its own success - the account opening and registration part can be lengthy and, at times, frustrating. Lots of people in line, it appears...

But all in all it was well worth it!

Good idea to buy now or in the near future - way to go.

 

3 hours ago, ale83 said:

 

So true. This is very well put.

 

 

 

 

Right, I didn't specify it earlier in the Trade Republic discussion with @Cestrian but I'm not currently using that to manage my life savings. More of a day trading/medium term investment tool on a "hobby" level. Managed to make some gains without spending weeks analyzing balance sheets :).

 

For me it’s a case of using this time to experiment a bit. Of course I will balance it out and also not invest money I rely on elsewhere. I agree about the markets not having bottomed out yet. When companies release quarterly or half-yearly figures, particularly those which produce or heavily trade with China, I can imagine they will take another hit.

 

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On 3/10/2020, 9:10:54, Cestrian said:

Thanks! I registered with it this evening. Lots of people in the line but it only took 7 minutes for my turn.

i figure that with the current climate and shares plummeting now would be a great time to buy. Once the situation improves the prices should revert back to normal again, resulting in a healthy profit.  Obviously it means waiting it out but that’s ok.

so whats do you think turn average turn-around time..from account sign-up, verification and buying stock/fund etc. or any recommendation?

Also is it english supported? 

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On 3/11/2020, 5:50:39, Cestrian said:

 

 

For me it’s a case of using this time to experiment a bit. Of course I will balance it out and also not invest money I rely on elsewhere. I agree about the markets not having bottomed out yet. When companies release quarterly or half-yearly figures, particularly those which produce or heavily trade with China, I can imagine they will take another hit.

 

 

I think Welt (German Newspaper) summed it up best.

 

To stop the Pandemic you have to kill the economy.

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I have been using Trade Republic for the last few weeks I am happy with the app and the cost of transaction. I also have an account with IB and my bank (The bank is too expensive  but trades on most of the exchanges in Germany).

 

I have IB to buy stocks not listed in Germany. IB fees are also priced easy with a $ 1 minimum fee for stocks on U.S exchanges.

 

The only issue with TR is there is no support  phone number listed.  I have some Tax

related questions that I have sent them over mail. I hope someone contacts me with an answer or a support desk number.

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Trade Republic is not as good as Revolut!

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On 3/11/2020, 12:29:25, Starshollow said:

timing of the markets is something that most of the times for most of the people does not work. Therefore time IN the markets is so much more important.
While a little bit of fun and speculation can be a nice thing, please make sure that you have an overall balanced and fitting-to-you-personally set up an investment strategy for the long run. Where buy-and-hold is the main parameter to follow for good success.

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.

I'm not going to argue with a pro! ;)

However, if I have a few K's to "spend" and see that for example, Wirecard shares have tumbled due to their hiding their finances from the authorities, but that they are otherwise an innovative fintech, can I not make a good investment now since the chances of the share price increasing by at least 30€ in the next few weeks look promising?

wc.png.bcec6aa4fe03c894a5b8e3c63cbe975b.

 

 

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Does anyone have wirecard stocks here. I had bunch of them and lost a fortune within a day. 

 

Not sure what to do. I mean wait or sell right now around 25 to recover something, before its goes to Zero

 

 

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