What Are Frequently Asked Questions About Stocks?

How to start investing in stocks?

Before you start investing in stocks, it is worth remembering that it is important to spread over time, that is, to divide your purchases into several times. If you have 5,000 euros to invest, for example, invest in 5 shares and divide the purchases into two dates.

However, always invest in at least three stocks that are from different industries. This will significantly reduce your risk compared to investing in just one stock. If you only invest in one stock, be aware that the value of a stock can fall by as much as 50%. The shares provide the best long-term return.

How much should you buy?

It is often thought that investing in stocks is only for the rich or that there must be really large sums that can be started. Of course, it’s good to have some kind of money buffer so you don’t have to sell your investments if you come across unexpected expenses.

Equity investing is a long-term endeavor and should be done in the long run. So don’t invest the money you need right next month.

However, investing in stocks is usually profitable in the long run. Allow time to do your job.

The minimum amount at which you can start buying shares is the current price of one share and the trading fee for that purchase.

How do I invest in foreign equities?

Many people think that investing in foreign stocks is difficult. In reality, buying foreign shares is no different from investing in a domestic stock exchange.

When investing in foreign equities, brokerage fees are often higher for many domestic intermediaries than when investing in domestic equities. It is, therefore, worth comparing stockbrokers' price lists before investing.

Foreign dividends are usually subject to withholding tax abroad, which is credited with Finnish tax. If the company distributing the dividend is from an EU country or a country with which Finland has a tax treaty applicable to dividends, the taxation of the dividend is determined in the same way as the Finnish dividend, ie 85% of the dividend received from a listed company is taxable capital income and 15% tax-free income.

What is a commission?

A brokerage commission is charged for each completed purchase or sale order. If your order is not fulfilled, no commission will be charged. If your order is partially executed, the amount of the charge will depend on the number of partial executions and whether they will be executed during the same or several trading days.

The brokerage fee is always charged on the cash balance of your equity portfolio only on the day following the transaction.

What is the cost of the shares?

There is a brokerage fee for the purchase and sale of shares and there may be costs associated with maintaining a book-entry account. These costs depend on your broker, so it’s worth comparing the costs of different providers.

For example, one location may have cheaper or free storage and higher costs for buy and sell orders, and another may have cheaper trading and more expensive storage.