Basic rules for successful investing - tips from financial experts

Basic rules for successful investing - tips from financial experts

According to a report from www.puls24.at,
You can make good money in the long term on the capital markets, but it is important to invest sensibly and soundly, emphasize financial experts. Stefan Goldschmidt explains that the capital market is likely to overtake common savings products and that wealth can be built up. Nevertheless, you should invest less speculatively and without a lot of bling to improve success. It is important to understand the product you are investing in and to know about the opportunities and risks, says Erwin Hof, head of the Vienna Stock Exchange Academy. According to financial expert Alexander Putz, it makes sense to invest in the stock market and you can get started even with small amounts.

The compound interest effect is an important factor in achieving long-term profits on the capital market, says Hof. The silent helper makes it possible to earn more money with money, as the invested money increases through price gains and dividends and larger profits can therefore be achieved.

Basically, the more you want to earn on the stock market, the higher the risk of losing something. Psychology also plays an important role here, as inner peace can be impaired when nervous decisions are made, says Goldschmidt. Lower volatility products can increase safety, such as dividend funds.

There is a difference between active and passive investing that relates to investment decisions and ETFs. Passive ETFs track an index and do not make their own investment decisions, while active funds try to achieve the best possible performance through conscious decisions. Passive ETFs are typically cheaper and require less work for analysis and research.

To reduce risk, you shouldn't invest all your money in just a few companies and it makes sense to diversify your portfolio. Investing in ETFs using a savings plan also has some advantages, such as the cost averaging effect and the possibility of starting with small amounts. It also forces you to save a bit and smooths out larger fluctuations in the longer term.