Libertex-Portfolio-account-with-Zero-Commissions---How-to-buy-stocks-(shares)-in-Ukraine Libertex-Portfolio-account-with-Zero-Commissions---How-to-buy-stocks-(shares)-in-Ukraine

How to buy shares in Ukraine?

The sphere of investment in Ukraine year after year develops modernizes and becomes more accessible to citizens. Classical and more familiar ways to increase funds, such as bank deposits, buying real estate and then renting out or reselling, are being expanded with new tools.

Over the past few years, the number of investments in financial instruments such as bonds and stocks has increased. And if the first ones are due to a decrease in demand for bank deposits, due to a significant decrease in interest rates or constant exchange rate fluctuations, then buying shares in Ukraine allows you to create a double benefit: by receiving dividends and by increasing the value of the shares themselves.

In order to learn all the subtleties of investing in shares of companies, you should understand what shares of companies are.

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What are company shares?

Stocks are securities issued by a company in order to raise additional capital for its business. Thus, investors who have acquired a stake in a particular company become its co-owners. Albeit to a small extent. The company, in turn, receives additional funds to scale its business: launching new products, expanding the range of goods, additional advertising campaigns, and so on. If the company is doing well, and it regularly makes a profit (namely, net profit, and not just revenue), then the board of directors has the right to decide to direct part of these funds to dividend payments. Thus, dividends are part of the company’s profit , which the investor receives, regardless of the increase or decrease in the value of shares.

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And what about the shares in Ukraine?

The profitability of investments in the stock market of Ukraine is relatively low. There are objective reasons for this. Firstly, the shares of Ukrainian companies that are offered for investment have extremely low liquidity, which in turn complicates the process of buying and selling securities. Also, investing in Ukrainian shares is associated with a large spread (the difference between buying and selling shares). Thirdly, the list of domestic Ukrainian issuers for trading is limited.

Therefore, Ukrainians carry out this type of investment, including through the purchase of shares of international companies. For example, companies like Facebook or McDonald’s.

The purchase of shares is a widespread practice abroad, and this culture of investment is being popularized every year in the country. There are more and more questions “how to buy Tesla shares” or “how to buy Google shares”, as well as other well-known companies that are in great demand for their goods and services in Ukraine.

The growth in the cost of the same Tesla is over 52% by the end of 10 months of 2021, which for an investor is a yield potential of 52% per annum*. It is almost impossible to reach such a percentage of profit from investing in popular assets in Ukraine (deposits, bonds, rental property).

Graph 1. Tesla stock performance

The share price of another popular IT giant, Apple, rose by 14% in the 10 months of 2021*. It’s also worth noting that Apple pays dividends, which increases this yield by potentially another 0.59%.

Chart 2. Apple stock performance

*Not an investment recommendation. Shares are given as an example of obtaining a return on investment.

Classic stock investing is not limited to buying one or two securities. Private investors and various funds acquire many different shares of companies, thereby forming their investment portfolio and reducing the risks of investing through capital diversification.

An investment portfolio is a set of various financial assets owned by an investor. As a rule, a portfolio of shares includes various companies according to the specifics of their activity, market segment and sector, or the potential for profitability (shares to receive dividends or fast-growing securities).

The market for investing in shares of American companies is available to every Ukrainian. That is, individuals can buy shares. To make any financial transaction, you need a broker, through which, in fact, the purchase of shares is made. With the development of information technology, one does not need to travel to the United States to trade shares of companies in this country. Today it is possible to even with the help of a phone because every major broker has a mobile application to track their financial results, as well as to instantly conclude transactions for buying and selling assets.

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Taxation for Ukrainian investors

Also, an important issue for many investors is the issue of taxation on this type of investment income. It is worth noting that when paying profits to investors or traders, the taxation of this income occurs on the basis of the voluntary declaration of such income in the tax return for the past year (column 10.6 of the Tax Declaration on property status and income). The personal income tax rate is 18% of the tax base, the military fee is 1.5% of the same tax base. In this case, the amount of income received abroad, in the declaration, you put down yourself.

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The last question: how to buy shares here and now?

To do this, you need a brokerage account. Also, the list of broker services should include exactly the assets of the stock market – shares with the possibility of receiving dividends on them. We offer to open a Libertex Portfolio account with zero commissions for the purchase of shares, here are a few key features of the trading conditions:

  • A wide range of US companies (blue chips are the most popular and liquid stocks of US companies)
  • Low entry threshold, the ability to buy one share and even a fraction of a share
  • Zero commissions for transactions with securities on the stock market
  • Getting dividend income
  • No fees for rollovers to the next day

The most important competitive advantage of Libertex Portfolio, as well as an important aspect for the investor, is the last point – the absence of commissions for transferring positions to the next day. In the market of brokerage services, this type of commission is common, which, of course, does not cover the profit, but can reduce it by 5-8% per annum. For example, the return on investment in Apple stock, minus these commissions, could be only 6-9% of the current growth of 14%.

A very important aspect in favor of Libertex Portfolio are ready-made solutions from the company for both novice investors and professionals in their field. The list of analytical products includes investment portfolios, analysis of ready-made trading strategies. Thus, the return on investment “Nobel portfolios” of the company, which are built on the basis of a mathematical model invented by Harry Markowitz, a Nobel laureate in economics, historically outstrips the average market return. For example, the profitability of the Nobel portfolio since the beginning of 2021 is 41.3% compared to the growth of the US stock index S & P500 this year by 24.8%.

Therefore, even if there are difficulties with an independent search for a particular stock for investment, you can always see how other market participants, experienced traders, and funds work with stocks.

Buying company shares is an excellent way to increase your capital. In Ukraine, this type of investment is gaining momentum, because the classic sources of passive income have lost their positions in terms of percentage in recent years.

Now there is a situation of the effect of accumulated funds, when deposits in banks were refused, due to low confidence in the banking system and falling interest rates. This was the impetus for the growth in property prices, which also grew in recent years with a virtually unchanged rental value. Free capital began to look for alternatives, and Libertex’x investor began to pay attention to the fact that he has been working abroad for more than 100 years. Perhaps the emerging demand will give impetus to the development of the stock market in Ukraine. But so far, investing in US stocks is the most attractive source of passive income.

Register an investment account Libertex Portfolio and start making profit today!

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