Are you considering starting investing or investing? At the start, a lot of information comes to you. We make it easy for you with a step-by-step plan: Investing and investing for beginners.
Make a plan
This is a very important step, but unfortunately, it is often forgotten. With the steps below you can make a good investment plan yourself and increase the chance of success:
A: Determine your goal
With the current low or even negative interest on savings, it is obvious that you want to get a little more return than on the bank account. But returns should never be an end in itself. It is best if you can link your wish for more return to a concrete investment goal. When is the next opportunity that you would want to spend the money on? Examples of commonly used goals are your pension, your child’s studies, or early retirement. By working towards a concrete investment goal, you make it easier on yourself. This gives direction to your choices.
B: Determine the term
Trade like you mean it. The time you have is one of the most important factors that determine your success. By choosing a goal, you probably also have insight into the period that you can invest. The longer you invest, the greater the chance of a positive result. Time ensures that you can make up for any losses. Do you need the money for a major expense in a few years? The risk is probably too great. If your portfolio falls sharply in value in that short period of time, there is little chance that you will end your investment adventure on a positive note. You only investor invest in the stock market with the part of your assets that you can afford to lose for the long term and allow it to grow. As a rule of thumb, you can keep it for at least 5 years.
C: Determine your investment
How much money do you want to invest? The investment amount is a determining factor as soon as you start looking for a party to invest. For example, many parties use a certain amount as a minimum. In addition, the costs often depend on how much money you invest.
When you start investing in the stock market, it can be exciting to invest a large amount in one go. Fortunately, this is not necessary. You can also opt for periodic investing or investing. You spread your entry moment over a longer period, for example by making a monthly investment.
D: Determine your risk
Investing in the stock market involves risks. But how much risk is up to you? Often a number of risk profiles are used, such as defensive, neutral, and offensive. The longer the term, the more risk you can take. An asset manager can advise you on this. When investing yourself, you choose the products yourself and you, therefore, determine your risk entirely yourself. Are you going to do it yourself and do you see opportunities for a very high return? Then the risk is usually also high. An important rule of thumb is that risk and return go hand in hand.