Last updated on November 2nd, 2022 at 05:02 pm
Getting into stocks can be exciting and potentially bring financial rewards, but it can also be daunting for newcomers who want to buy stocks in France. That’s why we’ve put together this handy summary, specifically for anyone looking to invest after settling in France.
Online brokers make it fairly straightforward for beginners to try out the stock market for the first time. After creating an account, you can browse stocks and buy and sell assets through your computer or mobile device.
The difference with traditional, full-service brokers is that the latter will more closely guide you with bespoke advice. But, as a beginner, you may not need that kind of in-depth service. Online brokers are convenient, can be less hassle to use, and usually don’t come with the higher commission costs of full-service brokers. Just remember to always read the small print, so you’re aware of all possible charges.
Whichever broker you choose, you should be able to trade:
- Individual stocks in various companies, making you a part-owner of those companies
- Bundles of stocks and other investments, known as exchange-traded funds or ETFs
Bear in mind, that this guide is just a quick overview of investing in France, and the information provided here is not intended to be financial advice. Investing in the stock market can be risky. You should consider seeking professional advice before investing in the stock market.
Buying Stocks 101
An online brokerage is your portal to the world’s stock exchanges. These may seem complicated at first glance, but they’re simply markets where you can buy stocks and sell assets in France. There are many stock exchanges to choose from. Some are almost household names – think the Nasdaq or the London Stock Exchange. The largest exchange in France is Euronext Paris, formerly known as the Paris Bourse. Many prominent companies are listed there, including L’Oréal, Airbus, and BNP Paribas.
A good online trading platform will be intuitive to use. You’ll be able to quickly navigate to the different exchanges and see the current prices of different assets. Whether you’re sitting back and exploring at home or want to sell quickly on the move, the platform should make the process simple.
Start Investing Early
Many people who’ve moved to France may feel they need to hold off on investing until some future point. Say, when you reach a particular point in your career. Or when your disposable income is over a certain amount. Actually, making your first investments as soon as possible can be wise. Here’s why.
It Can Help You Beat Inflation
Holding your savings in a bank account may not be the best way to keep up with the cost of living in France. If prices of goods and services go up, the value of your savings is likely to diminish over time. One way to deal with this troublesome effect of inflation is to put your money to work. In other words, you could invest it in stocks that may rise in value. Bear in mind this strategy tends to reward patience. It’s generally recommended you retain assets for several years to overcome any dips in the market.
You’ll Have More Time To Grow Wealth
Time is on your side when you invest earlier on in your life. Simply put, you’ll have more years in which to grow your assets, reinvest profits, and diversify your portfolio ahead of retirement. Plus, if your stocks are hit by market downturns, you’ll have more time in which to recoup any losses.
Diversifying Your Portfolio
We mentioned diversification above. Simply put, it means holding a range of different investments in various sectors and firms. This can be a good move because you’ll be spreading the risk. Say one company you’ve invested in suffers a bad period, and its shares plummet in value. Hopefully, your losses here will be mitigated by your other assets, which continue to do well. Investing in ETFs, which consist of different types of stocks, can be a good shortcut to diversifying your portfolio.
Where to Buy Stocks in France: Penny Stock Strategies
It’s understandable that you might be keeping a close eye on your budget while adjusting to life in France. The good news is you don’t necessarily have to spend lots of money to gather assets. For example, you can stick to penny stocks, which usually cost under one or two euros.
Penny stocks can be appealing as they allow investors to grow their portfolios without too much outlay. They also give you the chance to get ‘in’ on companies that may be on the verge of great success. The best-case scenario is snapping up a stake in a company that goes stratospheric in the future.
However, penny stocks do typically come with greater risk. That’s because the companies may be small and untested. Or they may be firms that have lost value due to bad management or market forces. It’s crucial to do your research before investing. This can be tricky as much data on such companies may not be available. But anything you can find out will help you make prudent choices when investing.
Where to Buy Stocks in France: Investing in Innovation
When you’re entering the stock market, it’s natural to gravitate towards companies and industry sectors that are booming. Often, firms that are innovating in fields like tech will attract big investment from, say, private equity groups. This can, in turn, cause their stocks to soar in value. Again, research is absolutely key.
Rising inflation and geopolitical tensions mean that global markets can be rather volatile. However, analysts have identified a number of sectors that may come with less risk and good growth potential. These include:
- Healthcare companies, including biotech and pharma stocks
- “Green” companies like those involved in plant-based foods and alternative energy are increasingly attracting private equity investment since they typically meet environmental, social and governance (ESG) criteria
- Tech firms, such as those specialising in cloud computing, which have seen huge demand due to the rise of remote working in the post-pandemic world
Remember, you can also invest in ETFs, which will provide you with a diverse collection of assets in various industries. You can browse various French ETFs here.
What is Profit-Taking?
If your stock rises in value, you may feel the time is right to sell it and secure your return on investment. This is called profit-taking, and there may be a few deciding factors. For example, you may feel a company’s growth won’t be sustained, and the time is right to sell. Or, you may simply be in need of funds and are willing to ‘cash in your chips’. There are plenty of experts online who’ll provide their own strategies for profit-taking. Ultimately, though, your decision will depend on your own personal circumstances.
Investing and Risk
However you choose to invest, the golden rule is to remember nothing is certain. Trading on the stock market is akin to betting. Yes, you can make informed decisions based on your research into various industries and market forces. But there are no sure things, and you should never invest more than you can afford to lose.
By diversifying your assets, keeping up to date with finance news, and playing the long game with your investments, you’ll hopefully grow your wealth while living in France.