A beginner's guide to buying shares in five steps

Investing by buying shares may well be a vague idea in your mind, but making the leap onto the stock market can feel somewhat intimidating at best. Which shares are suitable for beginners? How much money do you need? And most importantly, how do you avoid falling into a trap as an inexperienced investor? In this blog, we provide a clear overview and a plan of action.

The thinking time is over. You've asked yourself why investing is right for you time and time again. You've come to a clear answer, and that is that you should go for it. But what happens next? We're here to help you take your first steps in the world of investing straight away.

1. Make your investment goals as specific as possible

Before you get started, make sure you set clear goals. You may already have a few ideas, but it's worth having a clear endpoint for your investment adventure. What exactly do you want to achieve?

Would you like to save for the long term, are you aiming for financial independence, or do you simply want to explore the stock market at your own pace? Your financial goals form the foundations of your investment strategy.

2. What budget can you set aside (for a longer period of time)?

The good news is that you don't need a large amount of capital to buy shares as a beginner. It's just as easy to start with smaller amounts and expand your portfolio gradually.

There is, however, one golden rule – only invest funds that you won't need in the years ahead. Your shares need time to generate a return on the investment. Compound interest also needs time to work its magic.

3. Determine your investor profile

Determining your investor profile is an obligatory step for anyone who wants to buy shares as a beginner. It's important to know whether you are a defensive, neutral or rather more offensive investor. Once you have a clearer picture, it will also be much easier to determine the most suitable investment strategy.

4. Fail to prepare, prepare to fail

Long-term success as an investor doesn't come unless you have a clear plan in advance. That means it's time to fully immerse yourself in the world of investing, with or without the help of others.

• Do you opt for individual shares, funds, dividend shares and so on?
• Do you want to start as an active investor and decide the amount, frequency and type of shares you invest in for yourself?
• Or do you prefer to hand over management of your shares to investment experts? In the latter case, passive types of investing, such as ETFs or trackers, may be better for you.

5. Join forces with the right investment partner for you

Finally, when it actually comes to buying shares, you'll have to choose a suitable investment platform. You can do this through a broker. Brokers are often linked to a specific bank (as an example, Keytrade Bank also acts as an online broker), although that isn't always the case.

Whichever option you choose, make sure to pay attention to the following points before finalising your decision:

• How reliable is the partner in question, particularly when it comes to investing?
• Does the platform offer enough guidance and support with investing?
• Can you fall back on Belgian legislation in the event of any irregularities?
• What services and tools does the platform offer, and are they user-friendly?
• How much does investing cost in fees, transaction and other charges?

Ready to buy your first shares? Take these life lessons on board

As a reminder, we're outlining a few tips that you should never forget. Always keep them in mind when making any investment decisions in the future:

• Investing always entails a risk.
• Don't invest to get rich quickly; the stock markets aren't a casino.
• Don't invest all your money in one share; instead, spread your investments.
• Don't get too excited or discouraged by peaks and troughs; have trust in the long-term plan.
• Leave your emotions at the door. Anxiety, panic and greed are bad news for investors.

Enjoy attractive rates at Keytrade Bank

You've now got the most important information to start exploring the stock market. If you're keen to find out more about our offer, did you know that you can enjoy very attractive investment rates at Keytrade Bank? That also applies to smaller orders too, which are perfect for anyone who wants to start off slowly. Check out our low rates here.

It goes without saying that there's much more to discover at Keytrade Bank, too. Become a customer free of charge at no additional obligation and take a closer look at our user-friendly investment platform.

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