German investors are considered to be rather cautious investors. Of course, this does not apply to the entire German population. Nevertheless, it is a fact that on average, fewer people in Germany make their investments in securities than is the case in other countries.

Yet investing could be so easy thanks to a smartphone app, and yet many Germans shy away from investing in stocks. But there are also good reasons why investing in stocks is worthwhile.

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Reason No. 1: Fear of risk

There is a widespread belief among the German population that investing in stocks is a real game of chance and can best be compared to gambling. Thus, for many people, the stock market bears great similarities to a casino. Investing in stocks is equated here with betting in a casino.

For this type of non-investor, the fear of losing the investment due to uncontrollable factors is deep-seated. The way many non-investors view the stock market also contributes to this. They do not differentiate between the various investment opportunities.

Indeed, it makes a clear difference whether one decides to invest in securities or funds for the long term, or whether the investment is short-term speculation and day trading. It is important to know here that it is precisely through a longer investment period and broad diversification that one can drastically reduce the risk of loss. For non-investors, however, this difference obviously does not matter.

Nevertheless, one should invest in shares. Here, one should first clarify whether one belongs to a type of investor who is prepared to take risks or someone who would rather minimize the risk.

In any case, a broad diversification always plays an important role. A broad diversification also provides a certain degree of protection against inflation. Possible forms of investment here would be, for example, investment funds and also stocks.

Investment funds are particularly suitable for investors who would like to avoid risk. Compared to individual stocks, investors have already achieved a broad diversification with small investments. Should a company suddenly show weaknesses, the price gains of the other securities can compensate for these stocks.

Reason No. 2: It seems impossible to find the right entry point

As just mentioned, many Germans do not really know the difference between short- and long-term investing. That is why there is a completely distorted idea here of what skills one should have when investing in the first place.

Studies show that 61 percent of non-investors are firmly convinced that you can only be successful on the stock market if you know the right time to buy and sell. Strictly speaking, no one can predict when the right time will come.

However, it immediately becomes clear here that most Germans associate a securities investment only with short-term speculation. For many people, the stock market looks like this: Someone sits in front of a multitude of screens, incessantly observing the different price trends in order to wait for the second when the right purchase is made.

With a long-term investment strategy, on the other hand, it is not necessarily a matter of the right time to enter the market. For example, if you opt for ETF savings plans, you invest regularly over a longer period of time. The level of the share price does not play an important role here. Here, short-term price slumps can simply be set out with a long-term investment strategy.

Reason No. 3: Doubts and lack of knowledge about financial products

It has certainly become clear that most people have very limited knowledge regarding the financial products offered by the stock market. The vast majority, however, would like to understand the financial product they are investing in detail.

This is, of course, a very healthy approach, but one should nevertheless be aware that most losses on the stock exchange result from risk-loving investors speculating with financial products. Often, however, they do not understand how they work sufficiently or at all. Even stock market gurus recommend time and again that you should only invest in things you understand.

The fact is, the necessary knowledge is indeed lacking here, but little or no effort is made to acquire this knowledge. You do not have to be a stock market guru to do this, you just have to take the help of experts.

Reason No.4: Fees and costs trigger fear

Many Germans have an enormous fear of hidden fees and costs. Securities simply seem to be completely non-transparent to many, and yet there is a great desire for there to be sufficient transparency in any investment. Minimum terms as well as notice periods seem to be the biggest hurdle for Germans here. However, precisely these two factors are not relevant at all for trading in securities. But the second factor is the costs, which seem completely opaque to many people.

But actually this is not a problem at all, and it is absolutely transparent. To trade in securities, you first have to open a securities account. Costs are incurred for each order. However, a closer look at the numerous online brokers shows that you are not charged any custody account fees at all here.

But also with regard to the costs, for example the order fees or the costs for an ETF savings plan, a lot has changed in recent years.

But here, too, it is actually only necessary to consult a comparison portal, because here the different brokers are shown exactly with their costs and fees, so that the models are ultimately even very transparent, provided one takes the trouble to invest a little time here and compare at leisure.

Reason No. 5: People don't talk about money

Unfortunately, the topic of money is still a real taboo subject in this country. Many Germans do not want to talk about financial matters at any price. This already concerns one's own income, personal assets and extends to investments and asset savings plans. No one likes to admit that they are not in an outstanding financial position. Our culture of envy could be to blame for this (Yes, I am German, but with a different mind-set).

As a result, many Germans are almost resistant to advice when it comes to investment counselling. Yet, a simple information session could provide a great deal of clarification here and show that investing in the stock market is certainly promising and also profitable.

About Alexander Kelm

Alexander Kelm is a passionate value investor and runs the website Wall St. Nerd. Here, the passionate value investor writes in-depth articles on the topic of Value Investing. Value Investing involves analyzing a company's fundamentals and can be characterized by an intense focus on a stock's price, its intrinsic value and the relationship between the two.

Alexander Kelm offers online courses on stock investing.

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