Why choose to invest in stocks? Why should you invest in shares? An investment in shares can in fact be seen as an investment in a company. Listed companies issue shares when they are looking for more capital. As soon as you have bought a share, you are (a very small) owner of a company. But why exactly would you buy shares? For example, you can make a profit over a certain period of time via shares. For example, you can buy them because you want to achieve a higher return with shares than on your savings account. On the other hand, the risk can be a lot higher, which of course also means that the returns can be higher. How much a share is worth can be seen in the share price . This is a graph that shows a certain price trend of a share. This also shows how much people are willing to pay for the share. All kinds of factors can cause the prices to rise or fall. That is why it is often advised to invest in shares over a longer period. This means that you give your capital a longer chance to grow. Finally, people also buy shares for the possible dividend they receive from them. Dividends are a form of distribution of the company’s profit. Dividends are usually expressed as percentages and are often guaranteed by the company. So you receive a percentage of the company’s profit per quarter or year. Read more about making money with shares . To answer the question of why you should invest in shares, we have listed 5 advantages and disadvantages for you. 5 Benefits of Stocks 1. Benefit from a growing economy As the economy grows, companies tend to do better. That’s because economic growth creates jobs, which generates revenue and income. The higher the wage, the greater the stimulus to consumer demand, which generates more income in the coffers of companies, which in turn results in rising stock prices. 2. Stay ahead of inflation Historically, stocks have averaged an annualized return of 10%. That’s higher than the average annual inflation rate of 2.9%. It does mean you need to have a longer time horizon. That way, you can adopt a “buy-and-hold” strategy even if the value temporarily declines. 3. Easy to buy It has never been easier to invest in the stock market. You can buy stocks through a broker, a financial planner or online. After setting up an account, you can buy stocks in minutes. Some online brokers even let you buy and sell stocks commission-free. 4. Earn money in two ways Most investors plan to buy low and sell high. They invest in fast-growing companies that value value. This is attractive to both day traders and buy-and-hold investors. The former hope to profit from trends (short-term growth, also known as day trading ), while buy-and-hold investors expect and hope that the company’s earnings and stock price will grow over time. Both believe that their stock selection will allow them to outperform the market. The other group of investors prefers a steady flow of money. They buy stocks in companies that pay dividends. These companies grow at a moderate, slower pace. 5. Easy to sell Shares can be sold on the market at almost any time. Shares are also called “liquid”, which means that you can convert shares into cash quickly and at low cost. This is important if you suddenly need your money. Because prices are volatile, you run the risk of being forced to make a loss. The 5 disadvantages of stocks 1. Risk Investing in stocks carries an increased risk: you can lose your entire investment. If a company does poorly, many investors will sell, causing the stock price to plummet. When you sell, you lose your initial investment. If you cannot afford to lose your investment, you should buy bonds. You will have to pay income tax if you lose money through stock losses. You will also have to pay capital gains tax if you make money with your stocks. 2. Shareholders get paid last Creditors, bondholders and  preferred shareholders  are the first to be paid in the event of a company’s bankruptcy. But this only happens if a company goes bankrupt. A well-diversified portfolio should protect you if a company goes under. 3. Time When buying stocks, you should really research each company to determine how profitable you think it will be before you buy its stock. This takes a lot of time. You need to learn how to read financial statements and annual reports and follow your company’s developments in the news. You also need to keep an eye on the stock market itself, because even the best company’s price will fall in a market correction, crash or  bear market. 4. Emotion Prices fluctuate constantly. Investors tend to buy high out of greed and sell low out of fear. It is best not to constantly look at stock price fluctuations and not to let emotion take over. Make sure you check in regularly and stay calm. 5. The pros as competition Institutional investors and professional traders have more time and knowledge to invest. They also have sophisticated trading tools, financial models and computer systems at their disposal. As an individual investor, it becomes more difficult to gain an advantage. Compare stock brokers Did this blog make you interested in investing in stocks? Compare all stock brokers via our comparison tool to find out which broker best suits your investment strategy! Our reading tips for the novice investor

Stocks and Forex: The Difference Today’s active investors and traders have access to a growing number of trading instruments , from investing in the reliable blue chip stocks to the fast-paced world of futures and foreign exchange (Forex). Choosing which of these markets to invest in can be difficult, with many factors to consider to make the best choice. Perhaps the most important element is the investor’s risk tolerance and trading style. For example, buy-and-hold investors are more likely to participate in the stock market, while short-term investors including swing and scalp traders are likely to prefer forex due to its greater volatility. Comparison: Forex vs Blue Chip Stocks The foreign exchange market, or forex, is the world’s largest financial market; more than $6.6 trillion is traded in it every day. Many traders are attracted to the forex market because of its high liquidity, non-stop trading, and the high leverage that participants can enjoy. Blue chips on the other hand, are the stocks of reputable, financially sound companies. These stocks are generally able to be profitable in economic downturns and have a history of paying dividends. Blue chip stocks are often much less volatile than many other investments and are often used to add stable growth potential to portfolios. So what are the main differences between forex investing and stock investing? Volatility: This measures short-term price fluctuations. You could say that this equates to risk. While some investors, short-term day traders in particular, rely on volatility to profit from price movements in the market, other investors are much less comfortable with it and prefer lower volatility and risk. As such, many short-term investors are attracted to forex and many buy-and-hold investors are attracted to the stability that blue-chip stocks offer. Leverage: A second consideration is leverage. In the US, investors often have leverage of 2:1 in the case of stocks. The forex market offers substantially higher leverage, sometimes as high as 50:1, which can be even higher in some parts of the world. Is higher leverage always good? Not necessarily. Yes, leverage means that you can build wealth with a small investment (forex accounts can be opened for as little as $100), leverage can quickly wipe out your account. Trading Hours: Another consideration is the time period in which each instrument can be traded. Stocks are limited by the trading hours of the exchanges. The forex market, on the other hand, operates continuously on a global level. Due to its flexibility, liquid transactions can be executed at almost any time of the day, which is an advantage for investors who might otherwise not have time to trade due to their busy schedules. In conclusion The Internet and electronic trading have opened the doors of active traders to a large and growing variety of markets. The choice to invest in stocks or forex depends on risk tolerance , available capital and the ease with which investing can be done. If an active investor is unable to manage their investments during regular stock market opening hours, stocks are not the best option. However, if an investor is pursuing a buy-and-hold strategy and is therefore looking for stable long-term growth and dividends, stocks are the practical choice. The instruments an investor chooses must therefore fit well with their strategy and goals. Our reading tips for the novice investor

Start early Do you think investing is mainly something for older people? Do you think you are too young or do you have too little money for investing? Or do you plan to but keep putting it off? There are many reasons not to start investing when you are young, but there are even better reasons to do so! We give you 5 reasons why you should start investing today. Return on Return Return on return, or compound interest, is the almost mythical phenomenon in the world of investing. The more time your money has to grow, the greater the wealth becomes. Your money grows faster when you reinvest your profit every year, because you receive interest on the invested amount plus the interest. We will explain this with an example: Suppose you invest €100 at the beginning of the year and make a 6% return on it. At the end of the year you will have €106, with a nice profit of €6. If you leave the profit and get another 6% return next year, you will not have a profit of €6, but of €6.36. In the second year of investing, you will not start with €100, but with €106. It seems like a small amount, that €6.36. But if you keep this up in the long term, your wealth will grow considerably. In fact, if two people invest the same amount in total, with person X investing €200 per month for 10 years and person Y investing €100 per month for 20 years, person Y will have a much higher final amount. This is caused by the return on return. Based on the average net return of 4.6%, this results in a difference of more than €9000. All the time for market movements Investors know that there is a chance that the stock markets will perform less well for a while. Your money can then become less valuable by investing. That is not nice, but the longer your horizon, the greater your chance of a positive return. If you start investing at a young age so that you have an extra pot for your pension, for example, it is not a disaster if an interim dip makes your investments less valuable. You still have many years to more than make up for any loss. If you have decided to put money aside for a date far in the future, you can even play this smart. For example, you can invest according to the ‘life cycle’, a strategy that pensions also apply. It works like this: you can take more risk if you still have 40 years to go until your retirement. In the beginning, you mainly buy shares and a little less bonds, because more risk often equals a higher return. The closer you get to your retirement date, or another investment goal that you have set, the more you will reduce the risk. This gives you more certainty that your assets will retain their value at the end. Save money by budgeting Have you not started investing yet because you have no money left? A good way to put some extra money aside is budgeting. This allows you to visualize your income and expenses and always keep an overview. By putting some money aside at a young age, you will also be completely used to it later. That is a useful life skill. You probably do not have to take into account the mortgage or childcare costs when you are 25. Teach yourself now to invest a small amount structurally so that it will continue to go smoothly for the rest of your life. You don’t need any start-up capital Investing has become increasingly accessible in recent years. Where you used to have to save for years before you had enough starting capital to start investing, this is different now. Nowadays you can easily invest online yourself or have your money invested. With most brokers, a large deposit is no longer necessary. Of course, you can invest some of your savings. Higher returns than on a savings account can now be achieved quickly. Please note that this is also money that you can miss, because you can lose part of the deposit. No retirement fear Another thing you don’t think about when you’re young: your pension. At some point, something will start to gnaw at you and you’ll think “Shouldn’t I do something about my pension?” This feeling comes faster than you expect. Many Dutch people have no or too little pension that they are building up. This is because more than a million Dutch people work as self-employed persons and more and more people in employment do not build up a pension through their employer. People who do not build up a standard old-age provision have to arrange an extra pot for later themselves. By starting to invest early and investing small amounts at a time, you don’t have to worry about this. You now know that you are doing well and that you will reap the benefits later. Do you also want to start investing? Read up on the various possibilities and risks. Also choose a broker that suits you best by  comparing brokers . Our reading tips for the novice investor