The best tips and tricks automotive stocks

The best tips and tricks for buying car shares

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For example, a high, rising share price is not necessarily an indicator that you can really do well here. Quite the opposite: you buy the share for a high price but see it fall shortly afterwards.

On the other hand, you should get in when car stocks are low but the outlook is positive. Even a big name is no guarantee for a successful investment, but the position a manufacturer takes in the upheaval of the automobile industry is important.

Even with today’s future concepts such as electric cars and autonomous driving, however, it is not completely certain whether they will ultimately become established in everyday life.

It is possible that the hydrogen drive will steal the show from the battery or that we will drive with solar power in the future? However, it is certain that a revolution is on the horizon, and taking an in-depth look at the big players of 2020 and 2021 will help you make a targeted investment.

For example, take a look at the share price development of many providers, research the extent to which they are tackling the revolution on the car market and analyse which technology currently offers the highest profits.

Success may come through the back door. Don’t just focus on German and American car stocks. Asia is making immense strides forward and it is explicitly Chinese corporations that are excellently rated online and in the offline world.

Backing only one horse, whether CFD auto stocks in or commodity securities, is almost always a mistake. Spread your portfolio widely and don’t buy just one stock. Instead, get a package of shares in many promising candidates. Even if there’s a loss on one stock, you’ll make up for it with another.

At a glance:

  •     Look at long-term trends of the individual share
  •     Research which companies are involved in promising future technologies
  •     Buying car stocks when prices are high tends to bring losses
  •     Buy low on promising candidates and take advantage of the share’s upside potential.
  •     The industry is in upheaval, but the success of e-mobility & Co. is not yet guaranteed
  •     Spread your portfolio widely: investing in several car stocks reduces risk

What types of car shares are there?

Not all shares are the same, even in the world of the car industry. Thus, we distinguish between the following types of securities:

  •     The classic bearer share is actually the most widely traded. With it you have all shareholder rights and your name is not known to the company itself.
  •     With ordinary shares you, as a shareholder, have a say in the decisions of the AG. You are invited to the annual general meeting and can vote there – for example, on the amount of the dividend. The more shares you own, the more your vote weighs. The rule is: one vote per ordinary share.
  •     Compared to the ordinary shares, the preference shares are considerably cheaper. On the other hand, the voting rights of these shares have been withdrawn – you have no say at the annual general meeting. The advantage, however, is that the dividend is higher.
  •     Registered shares with restricted transferability are directly linked to your person. The owner gets an entry in the share register. In the restricted form, you must obtain the consent of the AG before selling. This is to prevent a hostile takeover.

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When should you buy shares in the car industry?

Technological upheaval phases are actually the perfect times for an investment. New ideas are thrown into the room and begin to establish themselves with a little courage to take risks. This is how electric vehicles, hybrids and autonomous driving have made it to some prominence.

Overall, 2020 could be one of those years where a zeitgeist has changed. Also due to the Corona pandemic, people are talking more often about real change and more and more classic car companies are following the example of Elon Musk & Co.

So after intensive research on the important players, you should place your bet and buy promising car stocks as early as 2021. Waiting too long could result in too many competitors in the market. Your favourite may not prevail.