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Individual Stocks in Germany: Portfolio Share, RSUs, Leverage and Taxes

Individual stocks are a bet on a few companies: from 1926 to 2016, 57% of US stocks returned less than Treasury bills, and 4% of companies produced the entire gain over T-bills [1]. Germany has its own tax rules for shares. RSUs (shares your employer transfers to you on a vesting schedule) are taxed as salary, and a loss on selling shares can be offset only against gains on shares. Geldchen's guideline: individual stocks and RSUs together under 15% of the portfolio, and no leveraged products.

Check your portfolio in the savings checklist →

Who this is for: the Island and Ladder phases, when you already have a portfolio on top of your emergency fund. RSUs also arrive on a vesting schedule in the Boat phase (the first 24 months after moving), so your share of individual stocks can grow without any decision on your part.

Does knowing your industry help you pick stocks?​

The data says no. In a Norwegian study, Døskeland and Hvide (2011) found that investors held an above-average share of stocks from their own industry and traded them more often. Adjusted for risk, these stocks earned them less than the market; the authors put this down to overconfidence [2].

An engineer sees the product from the inside, a doctor knows the drug market, and picking a company feels like an extension of the job. But knowing the product is not the same as knowing the price: what insiders of an industry can see is usually already priced in.

What share of individual stocks is too much?​

Too much means above 30%: if that part halves, the whole portfolio loses more than 15%. Geldchen's guideline is under 15%. Both thresholds are editorial guidelines: research explains the principle but sets no exact limit.

The share includes individual stocks in every account, including a foreign broker and your employer's plan: ESPP (buying employer shares at a discount) and RSUs after vesting. Unvested RSUs are not yours yet, but they are a future stake in the same company. A sector ETF doesn't count as individual stocks, though it doesn't remove concentration risk (Klumpenrisiko) in that sector.

The distribution of returns also works against a small set of stocks. The fewer stocks you hold, the higher the chance that you hold none of the 4% of companies that produced the entire gain [1]. A global index fund usually holds them for as long as they are in the index.

Why RSUs and employer shares are a double bet​

Layoffs and a falling share price often have the same cause, so RSUs tie both your salary and your portfolio to your employer. Selling your own company's shares can feel awkward, as if you had lost faith in your own team.

The share of employer stock follows past performance. Benartzi (2001) studied US retirement plans. Employees at companies with the strongest 10-year stock performance put 39.7% of their voluntary contributions into company stock; at the weakest, 10.4%. These allocations did not predict future returns [3].

A working question for each vesting: if this amount were paid out in cash, would you use it to buy your employer's shares?

How RSUs and ESPPs are taxed​

Shares as part of your pay are taxed in two stages. The value of RSUs on the vesting date (for an ESPP, the discount on the purchase date) is salary. Your employer withholds Lohnsteuer (wage tax) at your rate, plus social security contributions as long as your income is below the contribution ceiling (Beitragsbemessungsgrenze, BBG). Solidaritätszuschlag (solidarity surcharge, Soli) and church tax come on top if you pay them [4].

Price growth after that date and dividends are capital income, taxed at 26.375%. So selling right after vesting adds almost no tax: the cost basis is the price on the vesting date. Germany has no holding-period break like US long-term capital gains: the rate is the same after one month and after 5 years [4].

If the share falls after vesting, you don't get the withheld Lohnsteuer back. The loss on the sale goes into the Aktienverlusttopf (loss pot for shares) [4].

How much do investors lose on CFDs and knock-out certificates?​

In 2018, ESMA (the EU securities markets regulator) found that 74–89% of retail CFD accounts lost money. The average loss per client ranged from €1,600 to €29,000 [5]. BaFin (Germany's financial supervisor) studied turbo and knock-out certificates for 2019–2023: 74.2% of private investors lost money. The average loss was €6,358 per person, more than €3.4 billion in total [6].

For a long-term portfolio, Geldchen's guideline for CFDs, options, knock-outs and leveraged ETFs is zero. Each product loses money in its own way:

ProductHow you lose money
CFD (contract for difference)At 20:1 leverage, a 5% move against you wipes out the whole margin, and the broker closes the position
Knock-out and turbo certificatesWhen the price touches the barrier, the certificate expires, leaving zero or a small residual value
Leveraged ETFs (2x, 3x)Leverage resets every day, and in a choppy market without a trend the fund loses even if the index returns to where it started

An example for a leveraged ETF, before costs: the index rises 10%, falls 9.09% the next day and is back where it started. A 2x fund rises 20%, falls 18.18% and ends 1.8% below the start.

Since 16 June 2026, a knowledge test has been mandatory before you buy turbo and knock-out certificates, and trading bonuses have been banned [6]. For CFDs, leverage has been capped at between 30:1 and 2:1 since 2018–2019, and your loss is limited to the money in the account [5][7].

Why frequent checking and trading cost you returns​

The more often you look at your portfolio's value, the more losing periods you see. Benartzi and Thaler (1995) called this myopic loss aversion: in their model, losses weigh 2.25 times as much as gains. The model explains the historical premium of stocks over bonds with an investor who evaluates the portfolio about once a year [8]. This is about watching the price. Checking your plan on fixed dates, such as an annual rebalance, is a different matter.

Selling in the first months after buying is a bet on a price move, which makes it speculation, even if the stock belongs to a large company. Barber and Odean (2000) studied 66,465 households at a US discount broker over 1991–1996. The average investor turned over 75% of the portfolio a year, and the most active traders earned 11.4% a year while the market returned 17.9% [9].

In Germany, frequent trading also pays tax right away. An example (Geldchen calculation): €1,000 of gains above the Sparerpauschbetrag (annual tax-free allowance) on a sale after 2 months means €263.75 of tax immediately. A long-term holder pays the same tax on selling, and until then the whole amount keeps working.

Buying on tips from social media and Telegram: what to check​

Before you buy on someone else's idea:

  • Does the author hold this stock, and did they say so? Buying a stock, praising it in public and selling into the rise without disclosing the position is called scalping. It is market manipulation under Article 12 of the EU Market Abuse Regulation (MAR) [10].
  • Who pays the author: a broker for bringing in clients, the company itself, or subscribers to a paid channel?
  • Does the author show loss scenarios, or only gains?
  • Can you check the figures against the company's report?

The remaining checks are in the red flag catalog. The number of likes and views tells you nothing about risk.

On 17 February 2021, after the GameStop episode, ESMA listed the risks of trading on social media signals: unverified information, sharp price swings, and taking part in market manipulation [11]. Coordinated group buying to move a price can count as manipulation. Paid Telegram channels with "signals" fall into the same category.

A stock fell 30%: how a single stock differs from an index​

Historically, the global index has recovered after large falls, though there is no guarantee. A single company may never recover. Wirecard, a DAX member since 2018, lost more than 90% of its value within a week in June 2020. On 25 June it became the first DAX company to file for insolvency [12]. After a single stock falls, the main question is whether the company's business itself has changed.

The cost of badly timed buys and sells is measured on funds. According to Morningstar (Mind the Gap, August 2026), over the 10 years to the end of 2025 US funds returned 9.9% a year and their investors 8.7%. For the most volatile funds the gap was 2.1 percentage points, for the least volatile 0.4 [13]. The size of the gap is disputed: an article in the Financial Analysts Journal (2026) estimates that poor timing of buys and sells costs about 0.1% a year [14].

You can write down rules for this case in advance, while the market is calm: which falls you sit out, and under what conditions you sell an individual stock.

How dividends and stock losses are taxed in 2026​

Dividends and gains are taxed at 25%, the Abgeltungsteuer (flat tax on capital income), plus Soli of 5.5% of the tax, 26.375% in total. With church tax it is 27.82–27.99%. The first €1,000 a year is tax-free, €2,000 for married couples filing jointly (2026) [4]. The general rules are in the article on investment tax. Four more rules matter for shares.

SituationRule (2026)
Foreign dividendsThe company's home country withholds Quellensteuer (withholding tax); the double taxation treaty caps the rate, at 15% for ordinary US dividends. Germany credits what was withheld against its own tax on that income, up to 25% of the income and no more than the German tax attributable to it (§ 32d Abs. 5 EStG) [16]. Switzerland withholds 35%: the Swiss tax authority refunds 20% on application [15]
Foreign dividends within the SparerpauschbetragThere is no German tax, so there is nothing to credit the foreign tax against. At year-end the bank closes the Quellensteuertopf (foreign-tax pot) and shows the balance on the Steuerbescheinigung (the bank's annual tax certificate); in a tax return it can be credited against other German tax on investment income. If there is none, the balance is lost [16]
Loss on selling sharesCan be offset only against gains from selling shares, not against dividends, ETF gains or interest (§ 20 Abs. 6 EStG) [4]. The Bundesverfassungsgericht (Federal Constitutional Court) is reviewing the rule in case 2 BvL 3/21; as of mid-2026 there is no ruling [17]
Loss on Termingeschäfte (derivatives: options, CFDs, futures)Can be offset against any capital income. The Jahressteuergesetz 2024 (annual tax act) abolished the €20,000 annual cap, introduced in 2021, retroactively for all open cases [18]

When to see a Steuerberater or an adviser​

A Steuerberater (tax adviser) matters most in two cases. The first is vesting across two countries. RSU income is split between them by working days in the vesting period (Federal Ministry of Finance guidance as amended on 19 December 2025) [19], and if the split goes wrong, both countries tax it. The second is startup shares. § 19a EStG defers the tax for up to 15 years if the company has up to 1,000 employees, its turnover is limited and it is no more than 20 years old [20].

  • A Honorarberater (fee-only financial adviser) can help with a plan if individual stocks and RSUs make up more than 30% of your portfolio.
  • The Verbraucherzentrale (consumer advice centre) or BaFin, if someone sold you a turbo or knock-out certificate after 16 June 2026 without a knowledge test.

FAQ​

This is not legal or financial advice.

Should I sell RSUs right after vesting or hold them?​

Tax barely changes this choice: the basis for tax on the gain is the price on the vesting date [4]. Economically, holding RSUs after vesting is the same as using that part of your salary to buy employer shares each time. The criteria: what share of your portfolio is already in this company, how much your income depends on the same employer, and whether you have a cash reserve outside stocks.

How are dividends from US stocks taxed in Germany?​

The US withholds 15% if you have filed form W-8BEN (the US form that declares your tax residence), 30% without it [15]. A German broker credits those 15% against Abgeltungsteuer and withholds the remaining 10% plus Soli.

If all your capital income stays within the Sparerpauschbetrag (€1,000, €2,000 for married couples, 2026), there is no German tax, and there is nothing to credit the US 15% against: the bank shows it on the Steuerbescheinigung, and in a tax return it can only be credited against other German tax on investment income [16].

How much in Mitarbeiteraktien (employee shares) is tax-free?​

Up to €2,000 a year under § 3 Nr. 39 EStG (2026; €1,440 before 2024), if the plan is open to all employees who have been with the company for at least a year [20]. If the shares are bought out of your salary (Entgeltumwandlung, salary conversion), there is no tax up to €2,000, but social security contributions apply. Anything above the limit is taxed as salary.

RSUs for selected groups of employees usually don't qualify for the exemption, because the plan is not open to everyone.

Sources​

  1. Bessembinder, H. — Do Stocks Outperform Treasury Bills? Journal of Financial Economics 129(3), 440–457 (2018). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447
  2. Døskeland, T. M., Hvide, H. K. — Do Individual Investors Have Asymmetric Information Based on Work Experience? Journal of Finance 66(3), 1011–1041 (2011). https://abdn.elsevierpure.com/en/publications/do-individual-investors-have-asymmetric-information-based-on-work/
  3. Benartzi, S. — Excessive Extrapolation and the Allocation of 401(k) Accounts to Company Stock. Journal of Finance (2001). https://onlinelibrary.wiley.com/doi/abs/10.1111/0022-1082.00388
  4. Einkommensteuergesetz (EStG), 2026 version: § 19 (salary, including shares from the employer), § 20 (capital income regardless of holding period; Abs. 6: losses on shares; Abs. 9: Sparerpauschbetrag €1,000/€2,000), § 32d (25% rate and the formula with church tax). https://www.gesetze-im-internet.de/estg/__19.html, https://www.gesetze-im-internet.de/estg/__20.html, https://www.gesetze-im-internet.de/estg/__32d.html; BZSt — Kirchensteuer auf Abgeltungsteuer (2026). https://www.bzst.de/DE/Privatpersonen/Kapitalertraege/KirchensteuerAbgeltungssteuer/kirchensteuerabgeltungssteuer_node.html
  5. ESMA — ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors (27 March 2018). https://www.esma.europa.eu/press-news/esma-news/esma-agrees-prohibit-binary-options-and-restrict-cfds-protect-retail-investors
  6. BaFin — Studie: Vertrieb von Turbo-Zertifikaten an deutsche Kleinanlegerinnen und Kleinanleger (21 May 2025), https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Fachartikel/2025/Studie_250521_Turbo_Zertifikate.html; BaFin — BaFin interveniert bei Turbo-Zertifikaten (15 October 2025, in force from 16 June 2026). https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Pressemitteilung/2025/pm_2025_10_15_Turbo_Zertifikat_Knock_Out.html
  7. BaFin — Allgemeinverfügung bezüglich sog. Differenzgeschäfte (Contracts for Difference / CFD) (23 July 2019). https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Aufsichtsrecht/Verfuegung/vf_190801_allgvfg_Differenzgeschaefte.html
  8. Benartzi, S., Thaler, R. H. — Myopic Loss Aversion and the Equity Premium Puzzle. Quarterly Journal of Economics 110(1), 73–92 (1995). https://doi.org/10.2307/2118511
  9. Barber, B. M., Odean, T. — Trading Is Hazardous to Your Wealth. Journal of Finance 55(2), 773–806 (2000). https://doi.org/10.1111/0022-1082.00226
  10. Regulation (EU) No 596/2014 on market abuse (MAR), Art. 12(2)(d) (scalping) (2014). https://eur-lex.europa.eu/eli/reg/2014/596/oj
  11. ESMA — ESMA highlights risks to retail investors of social media driven share trading (17 February 2021). https://www.esma.europa.eu/press-news/esma-news/esma-highlights-risks-retail-investors-social-media-driven-share-trading
  12. Malay Mail (AFP) — Wirecard files for insolvency, becoming first DAX member to fail (25 June 2020). https://www.malaymail.com/news/money/2020/06/25/wirecard-files-for-insolvency-becoming-first-dax-member-to-fail/1878810
  13. Morningstar — Mind the Gap 2026 (August 2026), https://www.morningstar.com/business/insights/research/mind-the-gap; breakdown by volatility: ThinkAdvisor — The Fund Investor Return Gap Is Shrinking: Morningstar (6 August 2026). https://www.thinkadvisor.com/2026/08/06/the-fund-investor-return-gap-is-shrinking-morningstar/
  14. Fulkerson, J. A., Jordan, B. D., Riley, T. B., Yan, Q. — Bad Timing Does Not Cost Investors 15% of Their Funds' Returns. Financial Analysts Journal 82(3) (2026). https://rpc.cfainstitute.org/research/financial-analysts-journal/2026/bad-timing-does-not-cost-investors-funds-returns
  15. Finanztip — Quellensteuer: USA, Schweiz, Frankreich (2026). https://www.finanztip.de/indexfonds-etf/quellensteuer/
  16. Bundesministerium der Finanzen — Einzelfragen zur Abgeltungsteuer, BMF-Schreiben vom 14.05.2025: Rn. 202 (credit under § 32d Abs. 5 EStG), Rn. 205–206 (Freistellungsauftrag and the uncredited balance), Rn. 241c (the Quellensteuertopf closes at year-end) (2025). https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Abgeltungsteuer/2025-05-14-einzelfragen-zur-abgeltungsteuer.pdf
  17. Steuertipps — Aktienverluste nur mit Aktiengewinnen verrechenbar? Urteil für 2026 erwartet (2026). https://www.steuertipps.de/altersvorsorge-rente-finanzen/aktienverluste-nur-mit-aktiengewinnen-verrechenbar-verfassungswidrig
  18. VLH — Verluste aus Termingeschäften: Das ändert sich (Jahressteuergesetz 2024: €20,000 cap abolished for all open cases) (2024). https://www.vlh.de/kaufen-investieren/geldanlage/verluste-aus-termingeschaeften-das-aendert-sich.html
  19. Bundesministerium der Finanzen — Steuerliche Behandlung des Arbeitslohns nach den Doppelbesteuerungsabkommen, BMF-Schreiben vom 12.12.2023, geändert am 19.12.2025. https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Internationales_Steuerrecht/Allgemeine_Informationen/2025-12-19-steuerliche-behandlung-des-arbeitslohns.pdf?__blob=publicationFile&v=3
  20. Einkommensteuergesetz (EStG), § 3 Nr. 39 (€2,000 since 2024) and § 19a (deferred tax for startups), https://www.gesetze-im-internet.de/estg/__3.html, https://www.gesetze-im-internet.de/estg/__19a.html; Haufe — Zukunftsfinanzierungsgesetz zur Mitarbeiterkapitalbeteiligung: steuerliche Förderung (2024). https://www.haufe.de/personal/entgelt/zukunftsfinanzierungsgesetz-zur-mitarbeiterkapitalbeteiligung_78_594610.html