1 – Understanding the Basics of the Stock Market

1.1 What is a stock?

Investing in the stock market for beginners begins by understanding the concept of a stock. Imagine a company like a large pizza cut into slices: each slice corresponds to one share. By purchasing one or more shares, you become a co-owner of the company. Your potential profit comes from the increase in the share price and any dividends paid.

1.2 The Main Financial Markets

There are several exchanges where stocks are traded:

Euronext Paris (CAC 40, small caps)

Wall Street (Dow Jones, Nasdaq)

Other regional exchanges (Frankfurt, Tokyo, etc.)

Each has its own listing rules and hours. For beginners, focus on Euronext Paris: the hours are convenient (9 a.m. – 5:30 p.m.) and the companies there are well covered by the financial press.

2 – Choosing your platform and securities account

2.1 Selection criteria

When investing in the stock market as a beginner, choosing the right platform is crucial. Here are some criteria to compare:

Brokerage fees: €1 to €5 per order on average

Interface usability: clear dashboard, mobile availability

Educational tools: tutorials, webinars, simulator

Customer service: responsiveness and personalized support

Comparison table (example):

2.2 Opening your first PEA or CTO

Two main tax wrappers:

PEA (Share Savings Plan): tax exemption on capital gains after 5 years (excluding social security contributions). CTO (Ordinary Securities Account): more flexibility (international equities), but direct taxation of gains.

Example of actual costs over 1 year (assuming 10 orders):

PEA at Broker A: 10 × €1.50 = €15

CTO at Broker A: same fees + 0.1% custody fees = ~€20

For beginners, the PEA is often recommended to benefit from advantageous tax treatment.

3 – Building your first portfolio

3.1 Sector diversification

Equity diversification helps limit risks. Don't invest all your capital in a single sector! 3 to 5 Sector Rule:

30% Industry (automotive, aeronautics)

30% Services (banks, insurance)

20% Technology (software, semiconductors)

20% Consumer (luxury goods, mass retail)

Indicative table:

Sector Percentage Example of stocks

Industry 30% Renault, Airbus

Services 30% BNP Paribas, AXA

Technology 20% Dassault Systèmes

Consumer 20% LVMH, Carrefour

3.2 Risk Management

Even a well-diversified portfolio, it remains exposed to fluctuations. A few tips:

Never invest more than 5% of your capital in a single stock.

Set stop-loss orders (e.g., automatically sell if the stock loses 10%).

Rebalance your portfolio every quarter: sell outperforming stocks and strengthen underweighted stocks.

You now have all the keys to investing in the stock market as a beginner: understanding stocks, choosing a platform, and building a balanced portfolio. Take action today by opening a PEA or CTO, then create your first sector-specific speech. Share your progress and questions in the comments; and to receive weekly stock market tips and tutorials, subscribe to our newsletter!

Where to Start Investing

Starting investing can seem intimidating, but it's an excellent way to grow your money over the long term. Trade Republic is a platform particularly suited to beginners thanks to its ease of use and low fees. To get started, it's recommended to start with small amounts and gradually diversify your investments between stocks, ETFs, and other financial products. The key is to define your financial goals, invest regularly (even small amounts), and think long-term. Remember that all investing involves risk, but with a well-thought-out strategy and accessible tools like Trade Republic, you can begin your investing journey with confidence.