How to invest in the stock market in 2022?

Buy shares on the exchange directly

To invest in the stock market, you have many options. Indeed, the financial market today is becoming more accessible due to the development of brokerage companies. However, only one option remains the most obvious and most recommended. And this is the one from the direct stock market. In fact, to invest in the stock market, you can buy your shares directly from the stock market. This investment approach is much more suitable for long and medium term investments. Here you do not need a financial intermediary to make your investment.

However, you can always trust the acquisition of assets to a financial institution that will take care of promoting your order in the market. In any case, investments will be made within the framework of a centralized market. In addition, direct investment in the stock market can be carried out in different ways. But this is far from the only possible option for investing in the stock market.

Bearer shares or registered shares: what to choose?

However, as far as stock market investment options are concerned, you can choose between registered property or bearer property. Owning shares directly in nominal form involves investing directly in a company listed on the stock exchange and holding its assets in the latter. This allows you to enjoy some privileges in a listed company. This may be the right to vote, access to the general meeting, the receipt of annual reports or an increase in dividends.

The downside here is that management is provided by the company’s financial intermediary. This means that if you want to choose this method, you will have to open an account with each company whose shares you buy. That’s why it’s also interesting to consider owning bearer shares. Under regulatory administration, declaring income can be extremely difficult.
Also, if you don’t create a holding account with every company, you can keep your bearer shares. Thus, you have the ability to own your assets in PEA while remaining anonymous. The advantage of this solution is that it allows you to fill out a single tax form for all your securities, for all companies combined. And this is against the single tax form per line of a listed company in the case of registered ownership. However, this comes with storage and management fees, which can be very high.

Investing in the stock market with UCITS

In addition to the two classic holding methods we have just developed, you can also invest in the stock market through UCITS. These are collective investments in transferable securities, which are envelopes consisting of a large number of securities. They can combine several categories of stock market products. This greatly simplifies the holding and diversification of portfolios. Here too, the portfolio is managed by a specialist who decides which asset you should buy and what is the ideal time to invest in the stock market. However, you will be required to pay a management fee for the various transactions made on your account.

Position yourself in the stock market on indices with ETFs

To invest in the stock market, you can also use index funds and/or thematic funds, which are ETFs. They were designed to mimic the behavior of stock market indices. It can be an industry index or a geographic index. The peculiarity of ETF trackers is that they reproduce the growth or decline in the performance of their underlying asset inside. Please note, however, that the management fee for this type of instrument is one of the lowest on the market. And it is not for nothing that ETF management is primarily passive management.

Investing in financial markets with derivatives

Investing in derivatives is also an option for your financial investments. In general, it is recommended to choose products that include a leverage effect in order to speculate in the short term. Here we are not talking about long-term investments, but about short-term negotiations. However, this way of investing is not recommended for beginners. It is intended exclusively for advanced traders with experience in the stock market. Indeed, derivatives are quite complex in their functioning and composition.

In addition, the leverage effects they imply increase the level of risk for investors. In the case of poor analysis, the losses will be much higher. However, the benefits you can get with this type of product are invaluable. That is why, before you decide to trade them, you need to learn more about them and understand how they work. This will allow you to reduce the risk of losing and maximize your chances of winning. Finally, you can use derivatives as a portfolio hedge for your long-term investments.