DEGIRO Tutorial How DEGIRO Works: ETF, Stocks, Dividend Explanation

DEGIRO Tutorial How DEGIRO Works: ETF, Stocks, Dividend Explanation

Below is a summary DEGIRO tutorial on how it works, and how to buy ETF and stocks at DEGIRO. The summary will cover why to start investing, understanding fees, simple investment strategies, setting up and using a DEGIRO account, buying ETFs and stocks, and managing DEGIRO portfolio. In short, all questions about how does DEGIRO work are answered in the video. The following is a summary of the DEGIRO tutorial.

1.            Introduction to investing with DEGIRO: Explain why you want to invest and the benefits of using DEGIRO as a broker.

2.            Understanding costs and fees: Describe commission fees, currency conversion fees and strategies to minimize these fees.

3.            Simple investment strategies for beginners: Emphasize the importance of starting with ETFs and a basic strategy with two types of ETFs.

4.            Opening a DEGIRO account: Guide to opening an account, linking a bank account and understanding the main screen.

5.            Buying ETFs at DEGIRO: Explanation of how to find and buy ETFs, focusing on core selection for lower costs.

6.            Buying Stocks at DEGIRO: Discuss how to buy stocks, including setting limits and understanding different order types.

7.            Managing your DEGIRO portfolio: Discuss tracking trades, understanding dividends and the importance of a long-term perspective.

Introduction to investing with DEGIRO and how it works

Investing can be a powerful tool for financial growth, especially for those who want to invest their savings in a different way. DEGIRO, a widely used brokerage, provides a user-friendly platform for beginners to begin their investment journey. The appeal of investing through DEGIRO lies in its potential to yield solid returns, averaging around 8% per year, which is a significant improvement over traditional savings rates. This platform is particularly attractive to young investors who aspire to financial freedom, as it offers an entry into the world of stocks and ETFs (Exchange Traded Funds) with relatively low costs. The manual attempts to simplify the process of investing in DEGIRO by covering the basics of buying ETFs and stocks and outlining strategies to maximize returns while minimizing risks and costs.

Understanding costs and fees when buying ETFs and stocks through DEGIRO

A crucial aspect of investing with DEGIRO is understanding the associated fees and costs, which can affect overall returns. For stock purchases, DEGIRO charges commission fees, usually around €2 for U.S. stocks. For ETFs within the core selection, a lower fee of around €1 applies. However, be aware that fees can vary and a 0.25% currency conversion is applied for non-European trades.

It is important to take these fees into account, especially if you are investing smaller amounts, as they can proportionally reduce your returns. For example, a €100 investment in an ETF may incur a 1% commission fee. To minimize these costs, one strategy is to invest larger amounts less frequently, reducing the relative impact of the fees.

While DEGIRO is not the cheapest broker, it offers a balance of reasonable fees and a robust platform for beginners and experienced investors alike.

How does creating a DEGIRO account work?

Creating an account with DEGIRO is a simple process. First, you need to register and provide the necessary personal information. After registration, linking a bank account is essential to fund your investments. The main screen of the DEGIRO platform shows important information such as your balance, portfolio, available funds and profit or loss statistics.

For beginners, it is important to start with a basic account that is sufficient for most investment activities, including buying stocks and ETFs. DEGIRO offers several account types, but as a beginner, the simplicity and functionality of a basic account are usually sufficient. It is a user-friendly interface designed to help new investors get started in the world of trading.

In addition to investing in stocks and ETFs at DEGIRO, you may also want to consider the best real estate funds for diversification.

Simple investment strategies for beginners at DEGIRO

For beginners, the key to successful investing at DEGIRO is to start simple. Exchange Traded Funds (ETFs) are highly recommended because they offer diversified exposure to a range of assets, which reduces risk compared to individual stock investments. A practical approach is to focus on just two types of ETFs: an ETF for large-cap stocks (from large, established companies) and an ETF for small-cap stocks (from smaller, possibly faster-growing companies). This combination provides a balance between stability and growth potential.

For example, a global large-cap ETF provides exposure to large global companies, while a small-cap ETF allows for investments in a broad spectrum of smaller companies in different sectors. This strategy aims for an average annual return of about 8%, a realistic goal for beginners. In addition, this method simplifies the investment process, making it more accessible to newcomers to the investment world and laying a strong foundation for future investment efforts.

There are major differences between large cap stocks and small cap stocks. With an ETF, you don't have to worry about this as much, because of the large spread of risk. But higher returns can be achieved when investing in individual value and growth stocks. These can be both large cap and small caps. However, know well the differences in terms of risk and volatility.

How to buy ETFs at DEGIRO

Investing in ETFs (Exchange Traded Funds) is a crucial step for beginners at DEGIRO. ETFs offer a diversified investment portfolio in a single transaction, making them ideal for beginners.

To get started, navigate to the "Trackers and ETF" section on the DEGIRO platform. Here you can discover a wide range of ETFs. For cost-effective investing, pay attention to the ETFs in the 'Core Selection,' which offer lower or no commission fees, although administration and currency conversion fees may still apply.

Two recommended ETFs for beginners are a world large-cap ETF and a world small-cap ETF. The large-cap ETF invests in large, established companies around the world and offers stability and broad market exposure. The small-cap ETF, on the other hand, includes smaller companies with potential for higher growth. This combination creates a diversified portfolio that covers different sectors and geographic regions.

When selecting an ETF, consider factors such as the total expense ratio (a measure of the fund's operating expenses), the number of stocks included (indicating diversification) and whether it is an accumulating (reinvesting dividends) or distributing (paying dividends) ETF.

DEGIRO's platform provides detailed information about each ETF, including performance history, to help you make informed decisions. Once you choose an ETF, place a buy order and select a market order for immediate execution or a limit order to specify the maximum price you are willing to pay.

Limit orders can be used to automate the buying process. Suppose. ETF A now has a price of $100. You want to buy it automatically when the price drops to 90 euros. In this case, you can set a limit order with DEGIRO to automatically buy the ETF when the price drops to 90 euros.

How does buying shares at DEGIRO work?

Buying shares is an important part of the DEGIRO platform, which allows investors to own shares in specific companies. When buying stocks, thorough research and analysis are crucial. Factors such as the company's financial health, market position and growth potential must be considered. DEGIRO's interface provides tools for analyzing stocks, including historical price data and company fundamentals.

To buy a stock, search for it by name or ticker symbol in the "Products" section. DEGIRO offers two types of orders: 'Market' orders for immediate execution at the current price, and 'Limit' orders, where you set a maximum purchase price. For beginners, limit orders offer more control over the entry price. After selecting the stock and order type, enter the quantity you want to buy and confirm the order.

Consider transaction costs, especially for international stocks, as they can affect your investment return. Starting with a few well-researched stocks can help beginners understand market dynamics and build confidence in stock trading.

Effective buying and selling at DEGIRO works easily. However, the difficulty lies in conducting proper research before buying stocks. Conduct fundamental research. Buy stocks ideally for the long term. Remember that buying shares means investing in a company. The stronger the company, the safer the investment in short-term fluctuations.

Managing DEGIRO portfolio: dividends and transaction history

Effective management of your DEGIRO portfolio is critical to long-term investment success. Tracking your trades is easy on the platform; you can view buy and sell orders, dividends and overall portfolio performance. It is important to review your portfolio regularly to ensure it is in line with your investment goals and risk tolerance.

Understanding dividends is also important. Some ETFs and stocks pay dividends, which can be reinvested or withdrawn as income. DEGIRO provides information on future and paid dividends so you can track this aspect of your returns.

Unfortunately, looking up dividends through DEGIRO works cumbersome. There is no clear overview of total dividends paid out. When you go through the menu to overview and transactions, you can see how much dividend has been paid per share. Perhaps this can be converted to Excel, so that you can calculate the columns of total dividends.

Remember that investing is a long-term business. Patience and consistency are essential to seeing growth and achieving your financial goals.

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Happy Investors enjoy a happy life based on financial freedom, personal development and sustainable living. We enjoy the now, and invest for the long term. We help you become financially independent. From beginning to advanced investing in stocks, ETFs, real estate and more, to personal growth for sustainable success!
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