The classic savings account has long been a thing of the past, as investors now have far more options for investing their money over the long term. Although time deposits and overnight money are regarded as proven options when it comes to investing money, they do not promise long-term financial security, as interest rates fall to a low level and it is hardly possible to save a fortune. Just as lucrative appear the well-tried life and pension insurance, as new contracts are too expensive and low interest rates.
Many Germans Are Afraid Of the IPO
On the other hand, many Germans are reluctant to go public with their investments. According to its own statements, the Deutsche Bundesbank recorded trillions of funds lying around without interest on German giro or overnight money accounts. The stock market as a capital market for a meaningful investment remains without alternative, because with appropriate expertise, it is also possible for hobby investors to obtain a lucrative investment, as long as they deal with the economic background and bring along a little time to habits on get to know the capital market. The type of investment is up to the investor – Trading in gold or ETFs can be just as worthwhile as the “classic” equity investment. However, the investor is nevertheless bound by certain principles, since not every trade is lucrative at all times. Sometimes, investors should follow certain basic principles in order to invest in a successful investment over the long term.
Six Simple Rules for a Successful Investment
- Create a Stable Foundation
Even the highest house of cards collapses at some point, when the foundation is on wobbly feet. For the Columbines that means: before going public, investors should ensure orderly financial conditions. Debt should be paid off, the investment is only the next step. It is advisable to first get an exact overview of all paid and current loans and avoid further financial burdens, which would ultimately be in the way of investing. Many experienced investors hereby follow a basic rule: They only use money for investment, which they no longer need in the short or medium term. Funds that are available for payments or other obligations are not intended for the IPO!
- Set Goals
Investors should set short-term and long-term goals on the stock market. It should be clear in advance what purpose the investment has and to which goal it should be aimed. The type of investment is primarily measured by their purpose. For example, an investment fund is only worth a long-term commitment – for short IPOs, the costs would outweigh the benefits.
- Balance Risks and Profits
It is essential for investors to know about the possible risks and, in the best case, to bring them into line with the profits. Short-term investors must first adjust to market fluctuations and plan for other returns than long-term investors. These tend to be quieter and yield better returns on average than traders who invest in securities in the short term and exit when price falls. However, in the long term, investors need to take certain risks in order to earn high profits.
- Minimize losses
It makes sense to distribute the funds accordingly to avoid large losses. The different types of investments help offset losses with profits elsewhere.
- Pay Attention!
Even the “small amount” plays a role in the investment. Investors who are already subject to the fluctuations in the financial market and their money so many times against the tide, should not also deal additionally unnecessary fees. A checking or overnight money account should never cost money. For active funds, on the other hand, it is common for one or two percent of fees to be based on the initial investment amount. It is advisable to find out about possible savings early on and also to compare the brokers with regard to the services and fees – the Brokervergleich.net portal is a comparison portal that compares the fees of renowned providers and shows whether a change of custody might be worthwhile ,
- Divide Columbines Correctly!
Investments should be one thing above all else: easy to handle and transparent. Gold, stocks, bonds and real estate investments are, in addition to the classic checking and overnight money accounts, alternative ways to a successful investment. A mixture of different forms of application is even desirable, since each investment form brings its own strengths and weaknesses and complement each other. While a call money account is available on a daily basis and is hedged by law, interest on the time deposit account is higher and this investment is also considered safe, even if the money is unavailable for a period of time. ETFs, on the other hand, have low fees, sometimes high profits and less risk than individual stocks.