Savings accounts hardly yield anything. If you want to get more
money, you can consider investing your money. Here are 10 rules to
follow and make a success out of your investment;
1. Define the risk
- Taking more risks means more chance of a higher return in the long term. But then you must be able to withstand losses.
- A more risky investment usually has more ups and downs than a safer investment.
- Have your investor profile drawn up by a professional. Choose a bank
that uses a management model that is dynamic and unique for each
client.
2. Define your investment horizon
- Keep in mind your age, but also the question when you need your money at the latest.
- Do not make risky investments if you need the money in the short
term. The longer your investment horizon, the more space you have to
absorb fluctuations.
- If your investments performed better than expected in the short
term, you can in some cases sell earlier than expected. An investment
horizon is purely intended as a guideline.
3. Do not put all your eggs in one basket
Spread your money over various savings and investment products.
A defensive investor best invests 90% in safe investments (such as
savings accounts, government bonds ). The remaining 10% can be used for
investments with more risk and (normally) more likely to generate a
higher long-term return. A less defensive investor will hold a higher
percentage of risky products (such as shares), but never 100%.
If your portfolio is small, or if you do not have the time or
knowledge to manage it yourself, you can buy a mixed fund or roof
fund. This type of fund invests in a diversified manner, so that your
portfolio is also spread out.
4. Do not do market timing but buy piece by piece
Do not just spread the risk, but also spread over time. If there is a
price correction then you buy at a lower market price at that time, so
that your overall purchase price decreases. This way you can benefit
more quickly from a price recovery.
5. Avoid useless costs
For most of the funds that some Bank offers, you may end up paying
0% entry and exit costs. For some bonds on the secondary market you pay
only 0.50% brokerage costs. Do research to see where you can reduce
costs.
6. Be critical
Newspapers, friends, acquaintances, your house banker: if they
recommend an investment that is too good to be true, it is usually not
true. Always weigh yourself whether the product meets your objectives,
and view the alternatives.
7. Do your homework very well
If you know nothing for example about the stock exchange or
investment products, then read a few books about it. Search the internet
or follow a course. For example, choose a mixed investment fund in the
first instance. That way you hardly have to follow the investment market
yourself, the fund manager does this for you.
What applies to investments in general also applies to specific investments:
- Know what you are buying: the sector, the company. If you do not understand anything, stay away.
- Read the financial reports on the investments in your portfolio regularly, analyze the competitive position and future trends.
8. Track your investments
Keep buying prices, dividends and interest. Only in this way can you
know whether (and which) investments really make a profit. Some Banks
can help you monitor the growth of your assets with user-friendly
tools (Online Portfolio Manager), make smart decisions and choose the
best products.
9. Keep your head cool
Do not get started if an investment does not initially do what you
expect, but also be prepared to take a loss. Do not let your decision be
determined by fear (if the rates fall) or by greed (if the rates
rise). In the short term there can be a considerable correction on the
financial markets, but the long-term investor has the time on his side
(if he has done his homework).
