Stock investment - pros and cons

The stock market is time-consuming, dynamic and exciting. There are opportunities to profit and to lose money, depending on how you choose to trade shares.

Starting to trade shares can be daunting and seem overwhelming. If you choose to go into investing in stocks, it is important that you are prepared for the pros and cons of this type of investment. You need to find out not only where to buy shares, when to buy and sell them, what the risks are - but also, and very importantly, how to keep track of your investments.

Here you'll find advice on getting started, background knowledge on investing in shares and the pros and cons of the stock market.

What are shares and why should you invest in them?

If you start investing in shares, you are investing in a stake in a company. As a general rule, you can invest in shares from any industry, market or part of the world. It is important to be aware of the price of the share. In addition, you should also pay attention to the historical development of the price of the specific share.

Sudden price rises can be the result of:

  • Positive company announcements, for example in the form of surprisingly positive financial reports.
  • Positive news such as unexpected demand for a product
  • Flight-to-quality; other stocks become less attractive and investors move their investment into that stock

The share price fluctuates according to the company's market rating and its future earnings prospects. In addition, it is important to remember that the share price is also influenced by society's attitude towards the company at the specific time.

If the price of your share in a particular company rises, i.e. becomes worth more money, you may choose to sell it. A good way to determine whether to sell a stock is to ask yourself "If I didn't own this stock, would I buy it at this price?" If you can answer no to this question, you should consider selling.

By selling your stock at a higher price than you bought it at, you can thereby realize your gain - that is, generate a profit. It's important to remember that if you keep the stock investment, you still have the gain, it's just not realized yet.

It is important to check the tax implications of realising a gain to avoid unpleasant surprises.

In other words, buying shares is a choice to support a company, at least indirectly. That is why it can be advantageous to invest in shares of companies or in markets that you personally consider important.

It is also important, when you choose to invest in shares, that you pay attention to how the company is performing in general. If a company historically fluctuates a lot in terms of performance, investing in it can be more risky - it can mean both higher returns and higher losses. Conversely, a company that is performing steadily may mean lower risk, but also reduced opportunity to earn larger amounts.

Tips when starting stock investing:

  • Look at the history of the stock you are considering buying and see if large swings in the stock can be explained by news or other events.
  • Check the company's communication to investors - this is also called investor relations. For example, examine published financial statements and the company's announcements about future earnings expectations.
  • To assess whether the stock is priced high or low, look at key ratios. For example, this could be "Price-Earnings" (P/E) and "Earnings Per Share" (EPS). These ratios are used, for example, to assess whether the stock is "cheap" or "expensive" compared to other similar companies.
  • Research and news media are important! Search for news about the company to see if there is consistency between what the company itself reports, compared to news and the like for the company.
    Remember that a stock bought at a high price is not necessarily expensive, just as a stock bought at a low price is not necessarily cheap - stock investing is about long-term potential.

Advantages and disadvantages of shares

When investing in shares, it's important to know both the advantages and disadvantages of the market. That way, it's easier for you to figure out which stocks are right for you, and to know when to trade your stocks.



One of the advantages you will experience with stock investing is that it is not expensive to get started with. Therefore, depending on which share investment you choose, it will be both easy and relatively cheap to get started with.

In addition, when you invest in shares, you will find that you get closer to the market. You will have the opportunity to build up a more in-depth knowledge of the company, which in time can help you make the right investment decisions.

Furthermore, historical data shows that for the long-term investor, there is a higher return with equities than there is with bonds. This means that you have the opportunity to make more money from your shares if you manage your share investment correctly.


If you choose to invest in shares, however, there are also some disadvantages you should be aware of. Among other things, you will be relying on the company you buy shares in to perform well. This means that you cannot influence the outcome yourself, so you will have to put your trust in the company.

In addition, share prices fluctuate significantly more than bond prices.

This means that the risk of buying and selling shares will usually be greater than with bonds. However, this can be mitigated by looking towards more stable shares.

However, it is important to point out that in the case of significant interest rate rises or falls, there may also be significant fluctuations in the price of bonds, which can pose a risk.

Finally, it's important to remember that some professional investors are in equity investing full-time and have been for a long time. Stock trading is both time-consuming, extensive and requires oversight - especially if you aim to be constantly updated. It's a competitive market and you need to make it very clear to yourself what you want from your investments to avoid losing ground.

StoxIQ makes it easy to get started

As mentioned, getting started with stock investing can be confusing and time-consuming - just as it can be difficult to keep track of your stocks when you've been investing for a long time and have many stocks. This is where StoxIQ can help you.

StoxIQ helps you find the stocks that have historically had the best returns, as well as risk ratios. This means how big the historical return has been and how big the fluctuations have been - this is important for your investment horizon.

The app gives you the ability to create an overview of your stocks and how they are performing, in a uniquely optimised investment portfolio. Uniquely, StoxIQ also makes suggestions for your next investment. Based on historical data, daily updated prices and your personal preferences, the StoxIQ app tailors suggestions for you. In addition, the app offers suggestions for which purchases and sales you can profitably make.

This means that you will see stocks that match your past investments and that you will also benefit from in the future. You will have access to all this when you download our app and customize your personal investment profile.
In other words; the StoxIQ app makes it easier to get started with stock investing, or get a better overview of the stocks you already have.

Download the app now and experience how personalised suggestions optimise your stock investments.

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