When it comes to finances and investing money in particular, attention is required. Which investments are wise, what profit can be expected and how much risk is involved? Newcomers in particular are faced with countless questions. But with professional support from Point Capital, they can be answered quickly.
Why is it worth entering the stock market?
What makes buying shares so attractive in the first place? Shares represent companies and people who are always looking to maximize profits with commitment, creativity and expertise. They bring new products onto the market, attract more and more customers and, at best, continue to develop. Shareholders participate in this positive development through:
- Increase in value
- Participation in the company’s success
- Dividend income
If we look back over the last 30 years, investing in shares has clearly emerged as the most lucrative investment. According to the MSCI share index, the world’s largest companies have increased their value fivefold. This results in an average annual return of over six percent – a figure that is certainly worthy of note.
What questions should investors ask themselves before investing money?
As a future private investor, you should answer a few questions honestly in advance. They will provide you with valuable insights into where your path is leading and in which areas you need professional support. Finance is an important topic that you certainly don’t want to handle lightly. That’s why we’ve put together a short checklist of the five most important questions for you.
1. what are my goals and expectations?
Surely you don’t want to invest your money just for fun, do you?
There are various reasons why an investment makes sense:
- Retirement provision
- Asset accumulation
- The goal of being able to live off your own assets
- Inflation protection
These are just some of the reasons why private individuals want to invest money. Whatever your personal motives are: Set yourself clear and realistic goals.
2. what is my stock market knowledge like?
If you want to invest money in the stock market, you should have a certain basic understanding of it. This will protect you from major financial losses as far as possible. So ask yourself honestly whether your knowledge is sufficient or whether you would be better off getting competent support.
Especially as a newcomer, you are well advised to consult an expert from Point Capital. Don’t be shy – after all, no master has ever fallen from the sky.
3. what is the amount I can invest and how much price volatility can I withstand?
Don’t forget that the stock market is sometimes subject to strong fluctuations. In the worst case scenario, your shares could lose all their value and you could lose the money you invested. Therefore, think carefully in advance about how much of a loss you could cope with financially.
In addition, only invest capital that you are unlikely to need in the long term. It’s better to play it safe and never risk your livelihood without thinking!
4. how long is my investment horizon?
This refers to how long you would like to invest your money. It is possible, for example:
- a few months
- a few years (e.g. five)
- ten years and more
As a rule, the longer the investment horizon, the higher the profit can be. This is simply because price fluctuations and stock market corrections balance each other out in longer-term investments.
This allows you to take a higher risk. So don’t be put off by short-term negative developments. With long-term investments, there will always be fluctuations and prices will fall from time to time. But in the long term, you have a good chance of achieving an attractive return.
How are investment strategies related to the investment horizon?
Sensible investment strategies are designed for the medium to long term. Newcomers often check stock market developments several times a day at the beginning and are then disappointed when only minimal movements are observed. This is quite normal. Asset accumulation is a long-term process. It is important to keep the goal in focus.
A short-term investment, on the other hand, is more risky and has more to do with speculating than investing.
5 Do I want to take care of my investments myself and do I have enough time to do so?
As we all know, time is a scarce commodity. If you completely lose sight of the stock market in your stressful everyday life, you may miss important developments that require quick action. So it’s better to admit it too early than too late if you don’t have the time to stay in the picture. In this case, it is definitely advisable to hire an asset manager.
How to invest money for beginners
Security is an important keyword when it comes to investing, and this is exactly what we at Point Capital build on. As an independent asset management company , we invest primarily in innovative quality companies and pursue a systematic approach. We actively manage your assets and are co-invested with our own money.
Before you invest money as a newcomer, there are numerous questions to clarify. We have already touched on some of them. Both proper clarification and obtaining a third-party opinion are important for a sound basis for decision-making. Based on this, you can decide whether you want to take over your stock market investments yourself or place them in professional hands thanks to our services.
We will be happy to answer all your questions in a non-binding consultation. Just give us a call on +41 44 488 80 00 or fill out our contact form. We look forward to discussing the topic of investments with you.
