So many people, so many investments. How do you make the right choices? By researching what type of investor you are, you choose an investment product that suits you.
So many people, so many investment products
Whoever wants to start investing will notice how many options you have. Shares, options, funds, bonds or pension investments; they are all investment products for specific investors and goals. By researching what type of investor you are, you choose an investment that suits you.
Saving or investing?
The first question you should ask yourself is whether investing suits you. Due to the low interest rate on savings, many people consider starting to invest. They must realize that, in addition to a good return, a negative return is also possible. Therefore you always invest with savings that you do not need immediately and with which you can and want to take a risk.
Those who want certainty are more savers than investors. By choosing a savings deposit you can also increase your return on savings.
The do-it-yourselfer, the follower and the convenience investor
- Whoever wants to invest can go to a broker. There you can buy and sell investment products yourself via an online platform at stock exchanges worldwide. When choosing a broker, pay attention to trading options, rates and ease of use.
- If you have insufficient knowledge, time or desire to invest yourself, then fund investing is for you. Your monthly contribution is made before you invest within the chosen investment fund. An appropriate investment mix is selected based on the risk profile.
- Index investing is an intermediate form that is offered by a number of brokers. That way you do not invest in 1 company, but an index as a whole.
Defensive or offensive?
A defensive investor is risk-averse. Capital preservation is paramount and the goal is to achieve some capital growth in the long term. Investments that fit in this regard are bonds, real estate and investment funds where the risk is spread.
Short-term asset retention is less important for an offensive investor. The aim is long-term capital growth. These are of course extremes. Determining a risk profile makes it clear how much you want to take.
Invest for the long or short term?
It is possible to invest for the short term, even for a few hours. This is also called speculation and is more like gambling. The risk is high, but the return (if it goes well) as well. Most investors opt for the long term. How long it depends on when you want to use the money what your investment objective is. The longer your investment horizon, the less sensitive you are to price fluctuations.
The pension investor
Those who want to invest for a supplement to the pension, or to be able to stop working earlier, can opt for pension savings. You invest with a blocked account into which you can deposit a maximum amount each year (the annual margin). You can, for example, use a tax benefit for pension savings.