10 Tips for When You Want to Start Investing
Investing is a popular alternative to saving! The moment the savings interest rate at banks is very low, many people are considering bringing some of their savings elsewhere. Investing can be done in different ways. Investing often involves more attention. It is important to read well. In this article, we’ll give you 10 tips, which will help if you want to start investing.
Tip 1: put a part of your savings aside every month
When you decide to invest, this is a longer term choice. After all, in the short term you will often not get a return. Because investments are focused on the long term, it is wise not to invest your savings in one go. It is better to put aside part of your savings every month for your investments. The advantage of this is that the average purchase price of, for example, gold or shares drops. Where the stock prices are perhaps very high now, it will be possible in a year’s time. By buying part now and again in a year’s time, your risk will decrease.
Tip 2: Look at the volatility of investments
A second important aspect of an investment is the volatility of the type of investment you choose. In 2017 and 2018, the financial world was upside down, due to the arrival of various cryptocurrencies. Although these digital coins have been around for much longer, they rose to unprecedented heights by the end of 2017. In a few weeks, a coin could go over several times. Such volatility poses great risks and fortunately hardly occurs in other financial markets. Weigh the volatility of different investments against each other, to come up with an investment that suits you.
Tip 3: Read on the type of investment you choose
Have you found a suitable form of investment for the assets you set aside monthly? In that case, it is important to delve further into this investment. On the internet you will find numerous articles about different forms of investment. This way you will come to new insights and you can weigh the risks of an investment in a rational way. For example, when you decide to invest in stocks, you have countless opportunities. Do you choose an option on certain stocks, do you go for turbochargers and sprinters, or do you buy single shares? The moment you don’t know what a particular form of investment means, you unnecessarily put your assets at risk.
Tip 4: Discuss your investments with others
Now that you have found a suitable form of investment and know what this investment entails, you can discuss the investments with others. They may already have some experience with an investment and can give you more information about the advantages and disadvantages of this. By sharing information with each other you both become smarter! In addition, it can happen that your enthusiasm leads you to overlook certain risks. A neutral outsider can point out these risks. This can be someone from your environment, but also someone on an online forum.
Tip 5: Find an investment form that suits your assets
With a wealth of 10,000 euros, you will normally choose other investments than with a wealth of a few tons. Consider, for example, the difference in the possibility of buying a house, or a few thousand shares. It is wise for this reason to look for an investment that suits your ability! As your wealth grows, assuming you get returns on this investment, you can opt for other types of investments in the long run. When investing, consider any transaction fees that negatively affect your return.
Tip 6: spread your investment over different funds
In addition to the tips already described, it is important to ensure sufficient diversification in your investment portfolio. From your monthly investment you could put a part in shares, a part in crowdfunding, a part in art, and so on. In this way, a significant decline in the stock market has a lesser impact on your portfolio than if you would only have bought shares. Conversely, your return will never be maximum! However, it is very difficult to predict the exact market movements in advance. With a good spread you cover yourself and limit the risks.
Tip 7: Don’t be guided by emotions
It has already been described that emotions allow you to overlook risks. Make sure you never let yourself be guided by these emotions. When it goes a less phase, you can decide to sell some of your investments. It is unwise to put in a greater part of your wealth than you have agreed with yourself beforehand.
Tip 8: Look at the presence of an AFM license
If you choose an investment in real estate or, for example, in crowdfunding, it is important to choose the presence of an AFM license. The presence of an AFM license shows that an organization is controlled and is by the Netherlands Authority for the Financial Markets. As an investor, this offers you various certainties, although you always run the risk of losing money. Investing with an authority that is not affiliated with the AFM is strongly discouraged.
Tip 9: Searching for investments across the border
As you gain more experience in investing your own assets, you can also look across the border. In other markets, prices for a second home or, for example, shares of companies from certain sectors may be more favourable. In addition, some companies in others are further developing in certain areas, so that they can eventually become more valuable than Dutch companies. It may be interesting to look across the border as well. Now re-subsual, on the consequences that this can have. Consider the impact of different currencies on the value of your investment.
Tip 10: Never invest more than you can miss
Finally, the most important tip for a novice investor: never invest more than you can spare! While you hope you end up getting a good return on an investment, you run the risk of losing money. In addition, for example, a decrease in stock prices can lead to the fact that you have to leave the money invested for a long time pending a new rise. By never investing more than you can miss, you avoid financial problems as a result of these investments