You don't need to have spent months reading books or studying finance to be a good investor.
But what you do need are a few basic rules that you should always follow!
1. Starting early is worth it
It does not matter how much money you invest at the beginning. It is important to start, even if it is with small amounts. Why?
Ever heard of the compound interest effect? On invested capital you get interest, which is credited to the capital.
If the interest is not distributed and thus remains in the investment, it will earn interest together with the original capital in the following interest period.
So the assets grow faster. Easy or?
2. Diversification is your friend
As an investor, if you only buy shares of one company, your capital will be severely affected if the share price of that company falls.
When investing, you should reduce this corporate risk by buying stock in many different companies, preferably in different industries.
This is what is known as "diversification."
But how do you achieve it? Quite simply, by investing in ETFs!
3. Costs are your enemy
Investors want to achieve a high return with a low risk. That makes sense in principle, of course.
But people often forget that the strongest factors influencing the success of an investment are the costs and fees.
Here's a simple example:
We choose two ETFs, with different expense ratios. The first ETF has an annual fee of 0.1% and the second has one of 1%.
If the stock market grows 10% over a year, the portfolio would grow at 9.9% and 9.0%. So as an investor, if the costs are high, you lose a lot of return.
So here the cheaper the better!
4. Keep a long investment horizon
Serious future forecasts are impossible - even if some "financial gurus" see it differently. Markets must fall, so that they can rise in the long term.
You may or may not share this opinion. But the fact is, if you always try to choose the best market entry and exit, it is usually a matter of luck. It is therefore best to choose an investment horizon of at least eight to ten years in order to compensate for market fluctuations.
As a famous investor once said: "Time in the market beats market timing".
5. Your portfolio is not a money machine
Investing money is great! However, there should always be a stock of cash available, for example to pay forgotten bills.
In concrete terms, this means: Only invest money that is not needed on a daily basis.
It is important to remember the previous four points.
First of all, congratulations if you made it this far. We hope you could learn something :)
Last tip: (Unfortunately) there are always various conspiracy theorists whose main occupation is to scare people by predicting the end of the world.
Each person is free in his opinion and in his actions. Nevertheless, you should always think about a topic yourself and ask yourself how much truth is behind some statements.