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DEGIRO review: The company If you want to buy or sell shares on the stock exchange, you need a broker. Fairs only work with professional parties that have a permit. So if you want to trade on the stock exchange, you need an investment account with a broker such as DEGIRO. This party gives you…
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Why invest money?
More and more people want to start investing to build up wealth. It used to be very common to save capital in a savings account and receive interest on it, but nowadays, more people are choosing to start investing. Today, people with small and large assets are more likely to choose to invest. They do this for various reasons:
- It’s an exciting way of spending time that earns you money.
- To be able to retire earlier.
- Pay off your mortgage faster.
- Being able to pay for your children’s education.
- The ability to invest with little money.
Which dreams do you want to fulfill with the extra money? Whatever your motivation is to start investing, we help you on your way! With the help of our knowledge, you can achieve an attractive return with your investments.
Do you want to stop working earlier, pay off your mortgage or be able to help your (studying) children financially? Then you will need extra money later on. You probably think, ‘that’s something for later,’ but if you want to build tremendous wealth, then it’s time for action NOW!
As a rule, the sooner you invest money, the faster you build up a good return. Historically, in the last 10,000 trading days, 90 trading days made a difference. Choosing the best moment to get in is therefore extremely difficult to determine. Waiting for the best moment, therefore, often makes no sense.
Starting investing is very exciting for most people. You are essentially putting the money you have worked hard for into an investment whose outcome is uncertain. You are probably wondering how exactly investing works? What types of investment there are and what the return and risk are. We are happy to explain this to you step by step.
Investing involves both risks and opportunities. Whether you want to invest for a specific purpose or if you’re going to expand your wealth. You have complete control over the method in which you start investing. Before randomly investing in commodities, stocks, or bonds, it is good to establish a clear investment goal.
Choose your investment goal
First-time investors often start trading stocks because stocks are usually easy to understand. However, you may wonder if the news around companies is entirely transparent. The news about a company often has a significant influence on the price. A stock can lose more than 20% of its value in one day if there is bad news. Conversely, with good news, a value increase of 20% can also occur in 1 day.
In addition to stocks, companies can also issue bonds. Bonds are considered a safer investment than stocks because of fewer fluctuations and returns. A significant advantage of bonds compared to other assets is that companies are obliged to repay the loans to the bondholders. As an investor, you, therefore, run fewer risks, but this means that your chance of a high return is often much more limited.
You can determine the choice in which you will invest by looking at why you are investing. Below are some example situations:
Paul invests just before his retirement
Paul will be retiring in a few years, and he wants to invest his money to cover his retirement. Paul does not want to take too many risks. He doesn’t have much time left to make up for significant losses in the longer term. Paul is looking for a safe investment. Logical investments for Paul are low-risk investments, such as:
- Index trackers;
- Interest-bearing investments;
- Dividend-bearing investments and;
- Risk-averse bonds.
Mark invests to build great wealth
Mark already has an excellent budget to start investing and can afford some setbacks. Mark has a job that allows him to support himself and his girlfriend. Mark opts for investments with a somewhat higher return. He is aware that there is a greater chance that he will lose some of his money. On the other hand, Mark also knows that he can achieve a very high return. Mark would later like to have sufficient capital to invest in real estate or other more expensive investments and is willing to gamble. Mark, therefore, looks for high-risk investments. Attractive investments for Mark could be:
- Initial Coin Offerings (ICOs) and;
Investing without an investment objective
Do you want to start investing, but you don’t have a clear investment goal yet? That’s no problem. It would help if you always looked at the risks when investing. Earning a high return in a short period goes hand in hand with a relatively higher risk. If you are satisfied with a lower return over a more extended period, there are options where the stakes are relatively small.
Open an investment account
If you want to take the first step to invest, you need an investment account. You can choose to open an account at the bank, where you currently also have a savings and checking account. In general, the costs for this are incredibly high compared to execution-only online brokers.
Execution-only online brokers are specialized platforms where individuals can start investing themselves. Brokers are much cheaper and more straightforward than traditional banks. Furthermore, brokers are experienced as user-friendly, and the range of investment options is more extensive. A broker specializes in making investments, whereby a bank specializes in a much broader and less specific way.
Are you a savvy investor who wants to keep costs as low as possible when buying and selling investments? Check out my personal favorite best brokers.
Glad you got this far reading my articles! I want to give you some of my recommendations. I have selected these services based on my experience and dozens of hours of research. Here they come:
- Broker with 0% transaction costs for shares: With eToro, you can trade shares without paying commission. This means you pay 0% commission on your trades! Nowhere else can you trade stocks so cheaply as with eToro. Creating an account is also free!
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