Investing in Germany: How to choose a profitable asset?
Dwain Ross
24 / October / 23
Visitors: 324
Investments are, at first glance, a great way to generate passive income. But it is quite risky.
As you know, Germans are a thrifty people. And they prefer to do without risk. Therefore, most keep money in savings accounts and pay contributions to pension funds.Nevertheless, a fifth of German residents still prefer not so much to save as to increase savings.The most popular and stable area of capital investment at all times was real estate. The most popular and stable area of capital investment has always been real estate.
Most non-professional investors prefer to use the services of brokerage companies.Moreover, nowadays it is not even necessary to leave home: all services are provided online. This is convenient and practical. In addition, fees for services and transactions are usually fixed. While funds charge a percentage of the client's portfolio.
Online brokerage companies are the most suitable option for the non-professional investor. And also for those who are risk averse and do not have the ability to monitor quotes on a regular basis.
In addition, this option is suitable for foreign citizens living in Germany. Usually, online brokerage firms boast an English-speaking interface and support service in English.
In Germany, naturally, German brokerage companies are the most popular. For example, Trade Republic, Scalable and DKB.
The largest international exchange providers are Vanguard and Fidelity. Vanguard is known for its low management fees, while Fidelity offers a wider range of brokerage services.The market of online brokers in Germany is quite competitive. It is possible to choose the most suitable and profitable option.
Nevertheless, there is one advantage of cooperation with a German brokerage company. Namely, automatic withholding of 25% of capital gains tax and other state fees that are subject to mandatory payment. The bank, as a rule, automatically withholds all taxes from profits. And there is no need to include this income in your tax return.
In conclusion
Despite the difficult political situation in the world, Germany was and remains one of the most highly developed and wealthy countries. And external cataclysms seem to only strengthen its economy: Germany's GDP is not only not decreasing, but even growing.
No wonder, because Germany is the birthplace of such industrial giants as BMW, Siemens, and Adidas.
Fortunately, in the modern world it is possible to become a holder of shares of a large German company, even with modest financial capabilities and without trading experience.
However, you should strive to study the history of the companies in which you plan to invest. And especially to ask about the income of a particular company, at least for the last 5 years. And compare them with the revenues of a company working in the same industry.
Or trust a professional trader. However, trader's services are paid, and in the end it is worth learning how to collect a portfolio of securities on your own.
And unambiguously, you should invest your own, not borrowed funds, with the expectation of quick profit. After all, absolutely any investment is a risk to a greater or lesser degree. And even a professional trader can not always predict the fall of shares, resulting, for example, from natural disasters or political events.
Finally, it is not necessary to invest all available money in one asset. A variety of assets may slightly reduce the profit, but at the same time it will prevent you from losing all the invested funds.
