Find our complete and detailed fact sheets about the main stocks in the German stock market. Before buying or selling German stocks, it is important to be well informed and to carry out accurate analyses.
When you invest online or build up a stock portfolio, you can invest in the German stock market. Many of the stocks listed on the Frankfurt Stock Exchange are accessible to traders from other countries, especially European investors. But what are these shares and therefore which are the most important German shares that can be invested in and how can they be analysed?
As you probably already know, the financial centre where German shares are listed is the Frankfurt Stock Exchange. However, the shares in which you will be able to invest are limited and it is more complicated to buy or trade shares in small companies.
The shares you will be able to invest in from France or other European countries are generally shares in companies with the largest market capitalisations in that country. In other words, you will have no problem taking positions or placing orders on the shares that are included in the DAX 30, the benchmark stock market index in Germany.
Which German shares you wish to invest in depends on a number of factors. Firstly, you will need to make this choice according to your investor profile. Indeed, in order to be able to understand and anticipate future trends in these shares, you need to know these companies perfectly and be able to understand their capacity for growth.
Therefore, always favour a company or sector of activity with which you are comfortable. As far as the other elements to be taken into consideration are concerned, you will of course need to assess the capacity of the chosen shares to gain in value over time. To do this, you will need to carry out several different and complementary types of analysis, as we will see below.
Finally, before buying or selling a German stock, be careful to choose a stock for which you can easily find quality information. When investing in foreign shares, it is indeed important to make sure you have reliable sources to carry out your analyses.
Let's take a closer look at the analysis of German shares. As with shares from other countries, it is recommended that you use a variety of different types of analysis to maximise your chances of getting quality signals. The two most common types of analysis used by investors here are technical and fundamental analysis.
For technical analysis, consider choosing quality stock charts that report the price of the selected German share in real time and live. Ideally, these charts should allow you to quickly read current and past movements and also display various indicators.
As far as fundamental analysis is concerned, this time it consists of using data other than the share price and more specifically the events and publications that are most likely to have an influence on the share. This may include financial data of the German company such as results or ratios, news data with strategic operations carried out, partnerships, disposals and acquisitions, or data concerning competition or the segments in which the group has its main activities.
The comparison of the signals obtained by these two methods will enable you to maximise the effectiveness of these analyses.
Investing in German stocks can be done in different ways online today. We'll take a look at the different ways you can buy and sell German stocks today.
The first option is to buy German stocks for cash and hold them in your portfolio. This method of purchase allows you to benefit from a dividend for stocks that offer one, or to hope to realise a capital gain when you resell these shares in the future. Buying in cash therefore requires having a stock market account and using the services of a broker.
It is also possible to invest indirectly in the most popular German shares by investing in an ETF or mutual fund. An ETF is an asset that replicates the value of an index such as the DAX 30 and therefore allows you to make a profit or loss depending on the development of this index. It is composed of various German shares. The FCP is a stock market investment fund and therefore represents a basket of shares, which may be solely German shares or international shares with some German securities. Pooled investments are generally popular with investors seeking to diversify their portfolio by limiting orders.
Finally, it is also possible to invest in German shares without actually buying them. Many brokers or online brokers offer to use derivatives such as CFDs to speculate on the rise and fall of these shares. CFDs or Contracts for Difference are products that replicate the stock market performance of an asset such as a share. If you believe that the price of a German share will rise, you will take a bullish position and if you believe that the price will fall, you will take a bearish position. The gain or loss will then be the difference between the price of the share when you take the position and the price when you close the position. Note that there are also CFDs on the DAX 30 and other indices.
In order to choose one of these methods of buying German shares, you should first of all know your investor profile, taking into account your investment horizon (short, medium or long term), your risk aversion and the objective of your investments.