The uncertainty on the markets should by no means deter investments: financial experts recommend long-term investments

The uncertainty on the markets should by no means deter investments: financial experts recommend long-term investments

According to a report by amp2.wiwo.de, the stock market is facing some turmoil caused by factors such as inflation, interest rate shifts and geopolitical tensions. However, this should not deter investors from investing as long as their financial flexibility allows. With inflation of two percent, the purchasing power of a cash holding of 100,000 euros could be halved within around 34 years. On the other hand, compounding effects on the capital market could lead to considerable wealth with an annual investment of 5,000 euros and an annual increase of five percent.

The MSCI World Index has recorded an average annual increase in value of 6.5 percent per year since its inception in December 1969. Depending on the investment strategy, you can achieve significantly more – or even less. It is recommended to rely on a broad diversification in order to minimize the risk and to make low-risk provisions for old age. It also emphasizes that successful investment takes time and frequent trading carries the risk of missing out on returns due to emotional decisions.

Based on this information, it is important that investors adapt their investment strategy to the current market situation and think long-term. The current turbulence on the financial markets should not unsettle investors, but rather they should continue to act actively and proactively in order to achieve their long-term financial goals.