2. Magic word diversification
“The stock market is dangerous!” Say skeptics of stocks, ETFs & Co. This statement cannot stand still and needs to be differentiated: It is true that a stock market investment is riskier than an overnight money account, but only the stock market really offers the chance to make money to make it work for you. And: The stock market is only dangerous if investors invest incorrectly, too risky or too one-dimensionally.
One of the most important rules for trading on the stock exchange is: never put everything on one horse, spread your capital as widely as possible across countries, sectors and products away. There’s little point in buying just one stock or just stocks in the same industry. If such an investment yields long-term profits, then you have probably been very lucky – this “investment strategy” should by no means be the benchmark for future stock market investments.
Combine different investments. Depending on the type of investor (opportunity-oriented or security-conscious) and investment strategy (short-term, medium-term or long-term), it makes sense to use a call deposit account or a time deposit account as a security component in addition to shares, ETFs, certificates, investment funds, bonds and commodities such as gold.
A safety component should ideally compensate for fluctuations in the stock markets, but at least it should cushion them. The capital for the security module therefore does not flow into shares, real estate funds or commodities, but into overnight money or fixed-term deposits. A security component of 25 percent is sufficient for offensive investors, so in this case a quarter of the invested capital flows into secure investments. Balanced investors are correct with a 50/50 mixture, defensive investors should invest about 75 percent of their total capital safely.
Investors planning their investments for a term of ten years or more can also choose bond funds if they invest in euro bonds or are hedged against euros. In “Finanztest” issue 11/2018, Stiftung Warentest recommends, for example, these bond funds government bonds Euroland: SPDR Barclays Capital Euro Government Bond ETF (ISIN IE00B3S5XW04/WKN A1JJTP), Lyxor EuroMTS All-Maturity Investment Grade (DR) UCITS ETF (ISIN LU1650490474/WKN LYX0XK) and iShares Core Euro Government Bond UCITS ETF (ISIN IE00B4WXJJ64/WKN A0RL83). According to the financial tester, all mentioned pension funds are “1. Choice”. Finanztest also rates the following Euroland bond funds as “1. Choice”: SPDR Barclays Capital Euro Aggregate Bond ETF (ISIN IE00B41RYL63/WKN A1JJTM) and iShares Euro Aggregate Bond UCITS ETF (ISIN IE00B3DKXQ41/WKN A0RGEN). You can find out more about bond funds in the buying fund guide. By the way: mixed funds, which already consist of a yield component and a security component due to their structure, you must allocate the secure and the risky component accordingly.
A notice: Of course, not all products are necessary to diversify an investment well. A security component with interest investments and a return component are sufficient. The latter can, for example, consist of an ETF on the MSCI World Index as a basic investment and a high-yield admixture.