It’s never been easier to buy stocks. In just a few clicks, any individual can invest in the financial markets from their smartphone. However, the majority of French people are still hesitant to take the plunge, due to not knowing where to start. The first question is not to determine which stock to buy, but in what envelope to buy it. A detail that can cost, or save, thousands of euros in the long term.
Because in France, the tax framework in which you hold your securities is just as important as the securities themselves. Two envelopes coexist: the Stock Savings Plan (PEA) and the ordinary securities account (CTO). Each has its rules, its advantages and its limits. Understanding them well is already half the battle. Then comes the technical question: how to place a purchase order? Market or limit order…, these concepts, simple once explained, are the key to not finding yourself trapped.
PEA or securities account: choose the right envelope
Before getting started, you need to choose your container. “The first thing to do is not to buy a share, but to open a PEArecommends Charles Ruven, president of Ruven Office. Even with 100 euros. It is the opening date that causes the five-year tax period to run, not the amount invested”. And every day postponed is a day lost. “It’s a simple, free and often underestimated heritage gesture. »
The PEA allows, after five years of holding, to be exempt from tax on capital gains (excluding social security contributions). Its limit: it is confined to European equities and capped at 150,000 euros. To invest in the American or Asian markets, you will need to open an ordinary securities account, but the gains are taxed at the flat tax. The rational strategy is to “first maximize the PEA, then overflow into the securities account. Not the other way around »advises Charles Ruven.
ETF or live securities: the right choice to start
Once the envelope is opened, what strategy should you adopt? For Charles Ruven, “more than 85% of professional managers underperform their index over ten years. A beginner has no reason to think he will do better when choosing his stocks. » ETFs (exchange-traded funds) allow you to replicate the performance of an index (the CAC 40, the S&P 500 or a global index) for annual fees that are often less than 0.30%.
“A World ETF is 1,500 companies in 23 countriesfor less than 0.30% annual fees. This is maximum diversification at minimum cost. » For those who still wish to select live actions (lively titles), discipline is required: “systematically place a limit order. It teaches you patience and protects you from unpleasant surprises.” Unlike the market order, which is executed immediately at the available price (which can be very different from the displayed price in cases of high volatility), the limit order sets the maximum price you agree to pay. This way you can be sure not to buy more than expected.
How to place your first purchase order?
Once connected to your broker or your online bankingplacing an order is a few-step procedure. You select the targeted security or ETF, choose the quantity, then the order type (market order or limit order). Also remember to check brokerage fees before choosing your platform. On small amounts invested regularly, the difference is far from negligible.
The information contained in this article is of an educational nature and does not constitute investment advice. Any investment in the stock market carries a risk of capital loss.
