Investing in shares, making money with shares, but how? A golden rule for investors in shares is to ensure a good spread of investments and to spread the investor risk. Dare to sell some of your shares in order to take a profit. Choose part of your investment in savings, savings deposits, commodities, shares, funds. This spread of shares is essential in any checklist with investment tips for successful investing in shares, even for beginners. Investing in this way usually leads to a much better return. Spreading investments is often the key to success.
Don’t put all the shares in one basket, but opt for diversification
- Buying shares, the advantages and disadvantages
- How can you invest successfully?
- Diversification of investments is not nonsense
- Active investing or passive investing?
- Investing assets
- Investing in shares
- Spread your investment over time
- Key lock
Buying shares, the advantages and disadvantages
By buying a share you own part of a company. The AEX index contains the 25 most important shares that are traded on Euronext. The oldest known share in our country dates from 1606 to the Dutch East India Company, VOC. A share carries risk. You benefit from price increases and if a profit is made, you receive a dividend. Moreover, shares often also mean voting rights.
How can you invest successfully?
Anyone who invests their wealth in one share, one company, one country or one sector takes on an unnecessary amount of risk. It only needs to go completely wrong once to lose a lot of money. To become a good investor you must find a good balance between high returns and the level of risk. For small purchases, diversification is less important or may even be unfavorable, because the transaction costs per unit are relatively high. But if you really have something to invest, you ensure good diversity. You invest in:
- A savings account (cash money);
- A house, real estate;
- Raw materials.
Much research shows that those who ensure good diversification also achieve the best returns in the longer term. It is better to make a stable return on capital than to have to earn back your lost capital on the stock market. Moreover, you will sleep a lot more peacefully this way.
Diversification of investments is not nonsense
We are not going to diversify investments for the sake of diversification alone. We spread our investments and always try to make the right choices. First you decide for yourself how you want to divide the cake. How much in shares, bonds and otherwise. Then you will do stock picking. This means that you select those shares on the stock market that you believe are currently not too expensive and have great potential to rise. You do not focus on a single sector, but you select, for example, three sectors in which you have confidence. Think about the food, because we have to eat anyway. The technology, because we need knowledge and a third sector. Perhaps the banks are, but it is not yet entirely clear whether they are sufficiently out of the danger zone. The more experienced you are as an investor, the easier it is for you. If you are not yet experienced, you can practice on paper or look for a good fund manager of a well-performing investment fund. Then choose either several investment funds or an investment fund with sufficient geographical and economic spread.
Active investing or passive investing?
You can invest actively or invest passively. With passive investing you follow a specific index. The AEX, an index for bonds, commodities or real estate or another index. Or do you opt for trackers that automatically monitor developments on the stock market or an investment fund. Investing through an investment fund is usually a form of passive investing. With active investing, you actively decide where to invest and when to intervene. With a securities account, you are, so to speak, actively behind the buttons via Lynx or Binck and determine the moments when you buy and sell your shares. Active investing takes a lot of time.
Institutional investors always spread their assets over multiple investments. A typical spread for these large investors looks like this:
- Cash 10 percent;
- Real estate 10 percent;
- Raw materials 10 percent;
- Bonds 40 percent;
- Shares 30 percent.
- Perhaps a (small) part in bitcoins, BTC.
Investing in shares
Investing in shares always involves risks and when choosing a single company, that risk only increases proportionately. That is why, in addition to fund investing, index investing is often chosen. With index investing you follow a specific stock market index. Think of the AEX index, the Dow Jones, the Nikkei. Index investing in different indices by definition means that you spread your investment in shares. Warren Buffett also became enormously wealthy through index investing. Maybe that is something for you too. Or you can have it done for you, for example through Robeco or another fund manager, or you can try it yourself.
Spread your investment over time
You can also choose to spread your purchases over time. Some give orders to buy certain stocks every month to add them to the portfolio. So sometimes you buy too cheap and other times too expensive, but on average you are doing well with your investments. With diversified investing you prevent yourself from buying too much and too expensive at once.
Spread your investments to get the best return. An investment fund is also a good choice, because the manager of a fund is used to investing in a diversified manner in order to achieve good investment results.
- Why invest in shares?
- Investing in value stocks or growth stocks?