How to buy Swedish shares? - invest in Sweden (2023)
If you're considering investing in Sweden by buying Swedish stocks, then you're in the right place! Here, you will find information about various Swedish companies. You'll also see where you can buy Swedish shares at a glance.
Where can you buy Swedish stocks?
You can also choose to buy Swedish shares through an online broker. Do you want to know where you can invest in the Swedish stock market? The table below shows the best brokers you can use:
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Monitor the exchange rates
When investing in Swedish stocks, it's important to pay attention to the so-called exchange rate risk. Unless you use the Swedish krona yourself, you will buy the stocks in another currency. If your currency becomes worth less in relation to the Swedish one, you may lose money as a result.
Furthermore, be aware of possible additional costs for currency exchange when dealing with brokers. Many brokers charge an extra premium when you buy shares in a foreign currency.
Investing in the Swedish krona
You can also decide to invest in the currency of Sweden: the Swedish krona. Sweden is known as a relatively politically stable zone, which can make an investment in the Swedish krona interesting. However, this doesn't mean that the value of the Swedish krona is always stable: for example, in 2018 and 2019, the currency was under considerable pressure. You can read more about investing in currencies in this article.
What are the best Swedish shares for investment?
Of course, you want to invest in Swedish stocks with a good return. It's important to keep a close eye on the performance of companies. This can help you determine the best Swedish stock to invest in.
I often use technical or fundamental analysis to analyse Swedish shares. With these analyses, you can determine whether a stock is undervalued or overvalued. It's of course advisable to buy undervalued stocks.
Which Swedish shares can you invest in?
It's always essential to research which stock best fits your portfolio. Not all Swedish stocks are suitable for every investment portfolio. Below, I briefly discuss some well-known Swedish companies that you can invest in:
- H&M: this is perhaps one of the most well-known clothing brands in the world.
- Volvo: Volvo is probably the most well-known car brand in Scandinavia!
- Spotify: this big brand is widely known worldwide for its music streaming.
- Ericsson: this well-known company is mainly known for installing mobile networks.
- Essity: this Swedish company mainly produces hygiene and cosmetic products.
How to buy Swedish shares?
Step 1: select a broker
You need a broker to buy and sell Swedish stocks. Are you curious about which stockbrokers you can use to invest with in Sweden? Then take a look at my overview of favourite brokers:
Step 2: research and select
Next, research which Swedish stock you want to buy. It's important to dive into the numbers: that way, you discover if a company is financially healthy. Moreover, research whether the company is active in a sector with a promising future. Companies that are active in the field of green energy, for example, have above-average prospects.
Step 3: place an order
When you are convinced that the Swedish stock is an attractive investment, you can place an order. With almost all brokers, you have the choice between two types of orders:
- Market order: with a market order, you open the investments at the prevailing price.
- Limit order: with a limit order, you open the investment at a specified price.
With a market order, you are certain that the investments will be executed, but the price may be less favourable. With a limit order, you have full control over the price, but the investment may not be executed at all.
Tips for investing in Sweden
Research the economic situation
It's important to research the economic situation in the country thoroughly. Sweden is a prosperous economy with many wealthy people. Due to its welfare state, social problems are often limited, which can make investing in Sweden even more attractive.
Diversify your risks
In general, it's wise to diversify your risks. Don't invest all your money in a single well-known Swedish stock; it's wiser to spread your investments. You can also choose to invest in the OMX Nordic 30 to track the 30 largest companies in the country.
Only invest money you can afford to lose
Finally, it's important to only invest money you can truly afford to lose. This way, you can avoid making a wrong investment decision out of panic.
Investing in Swedish real estate
You can also invest in real estate in Sweden. Over the past ten years, real estate in Sweden has become much more valuable. However, in 2023 you can see that prices are dropping significantly due to higher mortgage rates. When investing in Swedish real estate, pay attention to the following:
- Bidding: the asking price is a starting price in Sweden, and people often bid against each other.
- Social: sending flowers to your bank contact person can be beneficial in Sweden.
- Price: the price per square meter is typically between $5000 and $7000.
- Real estate agent: there are no separate buyer's agents; often, agents work for both parties.
- Maintenance: many houses are made of wood, so be sure to check the condition of the maintenance.
- Additional costs: you need a "pandbrief" for the mortgage (+/- 2% of the purchase price) and a "lagfart" to register the purchase (+/- 1.5% of the purchase price).
- Intensive: maintaining and managing a home in Sweden takes a lot of extra energy; buying shares takes less energy.
Different types of investment accounts in Sweden
If you live in Sweden, you may encounter different types of investment accounts. In this part of the article, I'll briefly discuss these.
With an ISK account, your investments are reported to the tax authorities by the bank. The tax on the account is limited (from 0.375% in 2023). Moreover, no tax is levied on dividends; only the standard tax is calculated.
With an ISK account, it's not possible to offset losses. You also always pay the standard tax, even in the event of a loss.
A KF account is similar to an ISK account in terms of regulation. However, with a KF, the bank owns your investments.
A KF is advantageous if you want to invest in foreign dividend shares, as the bank collects the withholding tax. It's also possible to choose a different beneficiary for this type of account.
In addition to the disadvantages mentioned for the ISK, there are a few extra drawbacks: you have no voting rights on the general assembly, and you can't easily transfer stocks and funds to another account.
With an AF account, you pay 30% tax on the profits from your stocks or funds. With an AF, you have to report all transactions yourself. One advantage of this type of account is that you can offset losses. This type of investment account in Sweden can be advantageous for high-risk investments. The disadvantage is that you also pay 30% tax on dividends.
Which type of account is better?
An ISK account is almost always the best choice due to the low tax rate. You then pay a standard percentage on your investments. Only when you expect a return of less than 2% or the risks are very high, an AF can be an attractive option.
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