You do not need thousands of euros to start investing. Investment funds make financial markets more accessible, with some allowing investments of just a few tens or hundreds of euros.
Diversified or multi-asset funds may be worth considering, depending on your financial goals, investment horizon and risk tolerance. Think of an investment fund as a large cake, with each unit representing a slice of its overall portfolio.
Investment funds can also help you plan for your children's future. If you want to save for university or a trip abroad, consider discussing your options with a qualified financial adviser and setting up regular monthly contributions. Even €50 or €100 a month can help you build savings over time.
For example, if your child is three and you want to have money available when they turn 18, you have a 15-year investment horizon. This gives you time to save gradually, although investment returns are never guaranteed.
When Is the Best Time to Invest in the Stock Market?
There is no perfect time to invest. Regular, systematic contributions can help investors avoid the challenge of predicting short-term market movements.
Whether markets are bullish (prices are rising) or bearish (prices are falling), predicting what will happen over the next week or month is extremely difficult, even for experienced investors.
Over the long term, economic activity and corporate earnings have historically tended to grow, although this is not guaranteed. A long-term approach can help investors focus on their goals rather than react to every market fluctuation.
Investing: Key Considerations Before You Start
One of the key principles of the Money Framework is to build an emergency fund before investing money you may need in the short term. Once you have sufficient savings for unexpected expenses, you can consider investing the remainder according to your circumstances and objectives.
Some investors prefer real estate to the stock market. Property can help build wealth, but its performance depends on factors such as location, construction quality, condition and neighbourhood. Even properties in desirable areas are not guaranteed to retain their value.
Another important consideration is liquidity. Selling a property can take months, particularly during periods of economic uncertainty, and owners may have to accept lower prices. Rental properties also involve maintenance, taxes, insurance, possible vacancies and management costs.
Past performance does not guarantee future returns. Diversified securities can offer long-term growth opportunities, but their value can fluctuate and losses are possible, even over extended periods. Investors should carefully consider the risks, costs and time horizon of their investments.
Bank deposits also carry risks, as the 2008 financial crisis demonstrated. However, the level of protection depends on the institution, the applicable deposit-guarantee scheme and the amount deposited. Understanding these protections is essential when deciding where to keep your money.
Dave Ramsey wrote in 2016: “Money moves from those who do not manage it to those who do.”
The message is simple: understanding your financial choices and taking a long-term perspective can help you put your money to work towards your goals. Are you ready to take a more structured approach to saving and investing?
As World Savings Day approaches on 31 October, it is an opportunity to reflect on how we manage our money and plan for the future. Financial wellbeing starts with setting realistic goals and making informed decisions. Through its financial advisory services, Euroconsumers Invest helps individuals better understand their options and make financial decisions aligned with their objectives and circumstances.