Wednesday, December 8, 2021

Start Trading Like a Pro

Must read

Savings rates are low. Investing can be more profitable but also carries more risk. How do you get started? We help you on your way in 6 steps.

Step 1: Determine your goal

A clear goal provides guidance, you know what you are investing for. Are you investing to supplement your pension? For the study of the children? Or for the purchase of a new home?

Step 2: Think about how long you can spare the money

If you have more time to invest, you also have more time to absorb temporary setbacks. Investing the money that you need quickly is not wise. For example, if you want to buy a house. You should be able to spare the money for at least 3 to 5 years. This is the amount that you have on top of your buffer for unexpected expenses. You can calculate how big your personal buffer should be with a Buffer calculator. You can also have a financial plan made.

Avoid having to sell investments due to unforeseen expenses. It is annoying when stock prices have just fallen sharply.

Step 3: Think about how much risk you want to run

Hold up a mirror to yourself: do I mainly want to invest because the interest on savings is low? Or do I really want to invest money and time to achieve financial goals in the long run? It is important that you do not lose sleep if your money is worthless. Investing is not without risk. The value of your investments can rise, but also fall.

You can also think about alternatives to investing. For example, pay off an extra mortgage with your savings. Or (bank) saving for your pension.

Step 4: Choose to invest yourself or have them invested

Investing yourself, without advice

The rates for investing yourself at banks and brokers are lower than when you receive advice. You find out for yourself what you are going to invest in and you give the assignments yourself. This form is called 'execution only'.

Investing with advice

An investment advisor thinks and then looks along with you. Ultimately, you make the decisions about every purchase and sale yourself.

Asset management

You then outsource the management of your investments. You determine in advance what your manager may invest in. For example, only in shares from the AEX, or in investment funds.

Step 5: Choose what you want to invest in

There are different types of investments:

  • shares
  • bonds
  • mutual funds

Be well informed and only buy investments you understand. If you are going to invest in an investment fund, first read the document Essential Investor Information.

Step 6: Choose where you want to invest

Trade like you mean it. You can invest with:

  • Bank
  • broker
  • asset manager.

It is important that the party you are going to invest with provides clear, comprehensible information. You should feel at home there.

Pay attention to the costs

The costs of investing are deducted from your return. Investment costs are opaque. Providers use different terms for the types of charges. They also calculate costs in different ways. So inquire carefully with the party where you open an investment account or who you engage with your investments. You can compare the costs of asset managers and brokers.

More articles

Latest article

Categories