BUILD A FORTUNE WITH STOCKS? 8 TIPS FOR SUCCESSFUL INVESTING

BUILD A FORTUNE WITH STOCKS? 8 TIPS FOR SUCCESSFUL INVESTING

With savings, you can only get bad profits - this probably will not change in the coming years. Stocks are significantly better in direct comparison. However, building your saving in Germany has lot of opportunities. The following offers will give you the most out of your inventory.

Private exchange brokers give out a lot of money. Economics professors Andreas Hacketal and Steffen Meyer examined 40,000 bank direct customer securities accounts and evaluated portfolio structure, account movements and profitability.

With a sobering result: between 2005 and 2015, investors lost about 5.6 percent of annual income. After keeping deposits with 80% of the shares and 20% of fixed income securities on average, a return of 8.7% would be realistic. On average, investors reached only 3.1 percent.

Obviously, investor studies have shown great courage in this average portfolio structure. But it didn’t pay off.

Avoid Inner Prejudice

Too much love at home can be a problem when investing. If you own many German stocks, your portfolio has probably developed quite well in recent years. But now experts will tell you that you are lucky. 

On average, Germany accounted for 43 percent of the fields studied by professors Hacketal and Meyer for the aforementioned investor. However, after the capitalization of world stock markets, it was supposed to be only about 3%. 

The high percentage of German securities in private deposits has remained surprisingly constant in recent years, although it has never been easier to invest internationally.

According to experts, there are only a few incorrect schemes of actions and often a combination of different ones that reduce the success of long-term investments. It is worth studying them more carefully, because only those who know about mistakes can avoid them and act accordingly on the exchange in the long term.

Go Strategically

Meanwhile, we not only get a lot of information about our investment behavior, but, above all, we recommend that you keep your emotions under control and become the best investors. 

Even for our ancestors, people of the Stone Age, the ability to respond intuitively was vital for survival. When the danger was in danger, there was no time for a long analysis of the situation or consideration of opportunities. Only the desire to escape had a chance of success. 

These intuitive reactions are controlled by the limbic system, the oldest part of the human brain that has survived to this day in all of us. What does this have to do with errors in financial investments?

Largely because the limbic system is fast and powerful. Unfortunately, this also interferes with decisions in which a rational review would be the best way, as is the case with the stock market. Fear and greed are the most important emotions that negatively affect investment decisions. 

Fear prevents us from coping with the stock issue, and greed for big money has lured many investors into a trap.

And therefore you need to avoid mistakes:

Going slowly: report first, and then act.

Detect false information: filter out rumors, mass events or your prejudices.

Act rationally: create your largest long-term investment plan in the world.

Set firm rules in advance: for example, determine the weighting ratios of widely distributed capital ETFs and available deposits, as well as the frequency with which the portfolio should be analyzed and, if necessary, rebalanced.    

Define, implement and adhere to an investment strategy.

Without your own investment strategy, which you not only once created, but also pursued permanently, it will be difficult to create long-term successful.

Perfect time is not good

It would be too good, to be true: to catch a security exactly at its lowest price for the year and ten years later to sell it exactly to the point at the all-time high. The idea is also very tempting - to take only the good phases of the stock market on one card and leave the bad ones.

But the fact is, long-term investors often spend time hoping for the perfect time to enter or exit. As the investment firm included in the list of Finanztest has shown, time in the stock market is all, a matter of luck. 

After all, how can investors actually determine if markets have bottomed out after a period of weakness and will they go uphill in the future?

In the long run, it is worth investing with a good strategy and distributing securities in the long run. Although it's pretty boring, the results are better.

All news about the stock market

Scholars from the University of Frankfurt are following trends. They found no evidence that attempts to raise their money by choosing the right entry and exit times would be successful in the long run. Although losses cannot be demonstrated, they are caused by increased transaction costs for purchases and sales. Buying and storing in Germany is much cheaper.

However, especially brave investors who want to take risks with a small, well-defined part of their assets, and then act faster, should be aware of the timing in this part of their portfolio. 

When you buy these documents, you should think about the circumstances in which they will be resold, using stop loss orders and technical indicators to determine when to sell. However, as a long-term investor, investors do not need to spend time or nerves in search of the ideal time to enter or exit.

Tip: keep track of individual tasks and analyze the situation. Be honest with yourself, not all companies succeed. However, those who test their decisions and learn from mistakes are more successful.