How to invest in the stock market: guide for beginners

We'll explain the essential aspects you will need to understand to start investing in the stock market

You have decided to invest in the Stock Market, but you don't know where to start? You are interested in investing in financial markets, but you think it might be complicated and inaccessible? Don't worry: at BBVA, we will try to explain step by step.

Firstly, it is important to point out that yield from the stock market is basically generated in two ways: by buying stock of a company and selling it when the price goes up (what we call gains), or through dividends, which are the profits that companies distribute among their stockholders.

Secondly, although investing in the Stock Market may be very profitable in the long term, it is important to know a lot about it and operate with good investment criteria; we must not forget that this is investment in equity markets, either on an upward trend, but also sometimes on a downward trend. It is not possible to know the yield of a stock beforehand, which is why it is recommendable to invest only an amount that we will not need in the short term, and also to place a limit on the amount invested. It could happen that when you sell your stock, you get a lower price than what you paid for it.

Finally, remember that you pay tax on any yield you obtain from investments in the Stock Market. If you maintain your investment for over a year, the yield will not be subject to tax withholding and will be taxed at 21%. If, on the other hand, this yield has been generated in less than a year, it will be added to income from work and it will be taxed at the corresponding tax rate. Furthermore, after the first €1,500, dividends will also be taxed at 21%. This tax policy is for Common Territory, as Regional Treasuries apply a different tax percentage.

Stock market operations, such as buying and selling stock, carry fees that vary with each bank. If you take the decision to invest in the Stock Market, BBVA can offer you all the right tools to help you to invest easily and safely.