A Guide To Buying Stocks In Austria

Austria is an attractive prospect for investors, with its stable economy and strong sectors in hydropower, wind, and solar energy. The country's national stock market is the Vienna Stock Exchange (Wiener Börse AG), which is the largest trading venue for Austrian stocks. The stock market can be a great way to grow your wealth over time, and there are many options for buying stocks in Austria, from online trading platforms to investment apps. If you're a beginner, it's important to do your research and choose a reputable broker that suits your investment goals and budget.

How to buy stocks in Austria online

Firstly, it is important to note that you do not need a lot of money to use an online brokerage. Online brokers have become more accessible, offering a range of options for individuals with varying levels of capital. In many cases, you can start with as little as $10.

Choosing a broker

When it comes to choosing a broker, it is important to select a reputable one. Check factors such as fees, user interface, available assets, educational resources, the availability of a demo account, and customer support. You can also use a 'find my broker' tool to find the best online broker for your level of expertise and risk tolerance.

Brokerage account

You can buy stock directly by using a brokerage account or one of the many available investment apps. You can also choose a stockbroker to do it all for you.

Investment funds

If you want to put your money in an investment fund, you should go to your bank for initial advice and use an online calculator to work out the profit margins. After you have chosen your fund, your bank will open a securities deposit account to book the fund shares.

The Austrian stock market

The main stock exchange in Austria is the Wiener Börse AG (Vienna Stock Exchange). As such, trading here offers the largest venue for Austrian stocks and the narrowest spreads. The easiest way to invest in the Austrian stock market is to invest in a broad market index using ETFs.

US stocks

If you are interested in investing in US stocks, online brokers allow you to invest in the New York Stock Exchange through optimised apps that grant easy and fast access to the US financial markets.

Choosing a broker

Firstly, it is crucial to evaluate the fees and commissions charged by the broker. Some brokers offer commission-free ETF trading, while others charge a flat fee or a percentage of the total trade value as commission. For example, Interactive Brokers has extremely low fees, while eToro offers commission-free stock and ETF trading.

Secondly, consider the broker's features and trading platform. Evaluate whether the platform is user-friendly and offers the tools and support you need to make your trading journey smoother. For instance, Trading 212 offers a user-friendly platform with free trading on a range of assets.

Thirdly, ensure the broker is regulated by trusted authorities and complies with relevant laws and regulations. Look for brokers regulated by authorities like the Financial Market Authority (FMA), FCA, or CySEC, who ensure investor protection and compliance with regulations such as MiFID II.

Additionally, consider your trading goals and style. Choose a broker that aligns with your goals, whether you want to actively choose stocks or prefer a more passive approach, such as using a robo-advisor. Some brokers, like Raiffeisen Bank, offer various account types and leverage options to suit different trading styles and goals.

Finally, research the broker's reputation and reliability. Check their track record and ensure they are authorised to operate in Austria by the FMA or another reputable regulatory authority.

Some of the top brokers in Austria include Interactive Brokers, eToro, XTB, DEGIRO, Plus500, Saxo, and Trading 212. Compare these brokers based on the factors mentioned above to make an informed decision that suits your trading needs and financial goals.

The minimum investment

When it comes to investing in stocks, there is a fundamental rule: high returns are associated with high risk. The longer your capital is tied up, the higher the interest rate. Be cautious of promises of high returns that seem too good to be true. It is important to consider your savings, running costs, and the amount you can afford to invest. Some forms of investment tie up your funds for a long period, and early withdrawal often incurs costs.

In Austria, you can start investing with a small amount. The equivalent of $10 is usually enough to meet the minimum deposit requirements with an online trading platform. Many brokers do not require a minimum deposit to open an account, so it is possible to start trading with very little money. However, some stocks are quite expensive, with a single Google share costing over $2,000, for example. To make expensive stocks more accessible, many brokers offer the option to buy fractional shares.

Exchange-Traded Funds (ETFs) are passive funds that track a stock market index, such as the ATX in Austria, and combine all the securities that make up the index. They are traded on the stock exchange, and their price is determined by supply and demand. ETFs are generally cheaper than buying and selling individual stocks, and the risk is spread across a broad portfolio due to its diversification. The ongoing charges and management fees for ETFs are also typically lower than for classical investment funds because they lack fund managers.

Another option is Contracts for Difference (CFDs), which are financial products that take their value from an underlying asset. CFDs allow you to speculate on stock price changes and are designed for rapid buying and selling, usually based on technical analysis of price charts. They are higher risk and require more expertise but offer the potential for immediate gains.

The Vienna Stock Exchange

In recent years, the Vienna Stock Exchange has expanded its offerings. In 2019, it opened a third market for over-the-counter transactions. In 2020, it listed products denominated in cryptocurrencies Bitcoin and Ethereum, making real-time prices available for trading during market hours.

US stocks vs Austrian stocks

When considering investing in stocks in Austria, it is worth weighing up the pros and cons of investing in US stocks versus Austrian stocks.

US Stocks

The US stock market is the largest in the world and is traded in US dollars, the most sought-after currency. The New York Stock Exchange (NYSE) is the largest in the world by market capitalisation, and the NASDAQ is also one of the world's largest and most well-known stock exchanges. US stocks can be a good investment for a variety of reasons:

• Historical returns: Over the long term, the US stock markets have produced attractive returns for investors. For example, the S&P 500 Index has delivered an average annual return of about 9-10% over the past few decades.
• Diversification: Investing in a mix of US stocks can help spread your investments across different industries, sectors, and geographic regions, reducing your overall portfolio risk.
• Liquidity: US stocks are generally highly liquid, meaning you can buy and sell them quickly and easily.
• Accessibility: Almost everybody can access an investment in the US stock market. The minimum amount required to invest in US stocks can vary, with some brokers having no minimum investment requirements, while others may require a minimum deposit of 200 US Dollars or more.

Austrian Stocks

The Vienna Stock Exchange is Austria's national stock market and the largest trading venue for Austrian stocks. It guarantees the highest quality in trading, with full order books, real-time information, security, fairness, and transparency. The easiest way to invest in the Austrian stock market is to invest in a broad market index using ETFs. On the Austrian stock market, you'll find one index tracked by ETFs, the ATX® index, with a total expense ratio (TER) of between 0.25% p.a. and 0.32% p.a..

Brokers

Whether you choose to invest in US or Austrian stocks, you will need to choose a broker. Top brokers in Austria include CMC Markets, eToro, Interactive Brokers, and Plus500. These platforms provide access to a diverse range of financial instruments, including stocks, forex, commodities, and cryptocurrencies. It is important to do your research and choose a broker that best fits your investment goals, as the right broker can significantly impact your success when investing in stocks.

Frequently asked questions