You've set up your online trading account, you've transferred some money to it, and you're ready to buy... Here are some tips to help make the first purchase easier:
1. Know what you want to buy before you log in
If you're buying ETFs, a good idea is to have the information ready on which ETF you want to buy before you go onto the trading platform. This will cause less confusion and give you a clear purpose for logging in and finding your way through all the information.
It is definitely overwhelming to log into the platforms and to see all the things that you can do! We log in for a purpose and don't get distracted by everything else.
For example, find what you are looking to invest in on JustETF.com and copy the ISIN Number, which you can find on the page with the fund details. Paste this number into the search bar of your trading account provider.
2. Decide in advance which currency to buy in and on which stock market to buy
Following on from Step 1, when you paste the ISIN number into the search bar of your trading platform, you will most likely see a few ETFs available with the same ISIN number. This is because this fund is available on several stock exchanges and in several currencies - and can be very confusing for a beginner.
We've written a blog post about fund currency here.
To keep it simple, you could buy the ETF that is listed in the currency that you earn and plan to withdraw from eventually. For example, if you are living in Europe, you can buy the ETF in Euros on the Euronext Stock Exchange (EAM) or on the Frankfurt Stock Exchange (XET).
3. Decide what price you are willing to pay for the ETF
Once you have found the ETF that you want to buy, you will be ready to click BUY, which brings up more options for how to buy it.
Note: depending on the language of your platform, the wording might differ and you need to do some more research so you know what the terms mean.
The most straightforward approach is to put in a "Market" order, which means that you buy a certain number of shares at the market price, the price at the time of submitting your order. For this you just need to add how many shares you want to buy. Note: because the price is not 100% up to date, due to the information transfer between your trading platform and the Stock Market, your trading platform will not allow you to spend all the money in your account. For example, if you have 500 euros in your account and each share costs 100 euro, you will not be able to buy 5 shares because of this. Also, fees will be added to this cost so you need to have a little extra buffer in your account for this.
You can read up about the other types of orders here.
If you decide on these three things before you log in to your trading account, you are on a good path to make buy your first ETF!
Financial terms alert.... we use some terms here that you may not be familiar with. Please look them up on places like Investopedia if you don't understand them. As we are just starting out with the blog we cannot cover them here now but we will strive to do so in the future.