{"id":4975,"date":"2021-10-29T14:00:48","date_gmt":"2021-10-29T12:00:48","guid":{"rendered":"https:\/\/www.finguide.ch\/?p=4975"},"modified":"2024-09-04T11:42:30","modified_gmt":"2024-09-04T09:42:30","slug":"10-mistakes-when-investing-your-money","status":"publish","type":"post","link":"https:\/\/www.finguide.ch\/en\/knowledge\/10-mistakes-when-investing-your-money\/","title":{"rendered":"10 Mistakes When Investing Your Money"},"content":{"rendered":"
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Perhaps you unexpectedly received an inheritance or had your pension fund paid out… Perhaps you realize that at the end of the month you regularly have more left over than you have spent and your savings have added up. Then the question arises: to invest or not to invest? And if so, what should you pay attention to? Here is a list of the 10 most important mistakes you should avoid.<\/p>\n

We have updated this article, originally published in 2019, in 2023.<\/p>\n

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1. Unrealistic Goals<\/h2>\n

Investment expectations must be adjusted to the state of the financial markets. For years, there has been hardly any money to be made with fixed-interest securities (bonds). It is therefore clear that no returns can be achieved without taking risks. Even if someone brags about the 20% return he claims to have achieved, it must be clear that this was only possible by accepting significant risks and that he probably lost 20% or more in another year. If someone offers you the prospect of returns of 10% or more, you can assume that the offer is dubious.<\/p>\n

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2. Overestimating or Underestimating Your Own Abilities<\/h2>\n

An astonishing number of private investors think they can beat the professionals. They look for hot tips and take risks. This can turn out well or badly. Good results are attributed to their own abilities and bad results to \"the markets\". On the other hand, there are far too many people who are not interested in financial markets and do not invest their money at all due to a lack of expertise. These people have to watch as their savings are slowly being eroded by inflation. You don't have to be a financial professional to invest money. For beginners, there are mixed investment funds, so-called portfolio funds, which replicate investment strategies. If you want to invest more money, look for a skilled wealth manager.<\/p>\n

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3. Overestimating or Underestimating Your Own Risk Capacity and Tolerance<\/h2>\n

Your own risk capacity depends primarily on how long the amount to be invested will not be needed. The longer the investment horizon, the more risks you can take. Risk tolerance, on the other hand, indicates how much risk you feel comfortable with. The best measure of this is the loss you are still comfortable with. If 10% losses throw you off balance, your risk appetite is low. However, if you still sleep well even with 30% losses and are confident that the losses can be recovered by the end of the investment horizon, you probably have a high risk appetite. If you underestimate your ability and willingness to take risks, you are giving away returns. If you overestimate them, you will become restless in volatile markets and run the risk of selling your investments at the worst possible moment.<\/p>\n

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4. Greed and Panic<\/h2>\n

We humans have a tendency to succumb to greed and panic. When we hear that someone has increased their wealth tenfold with bitcoins, we want to do the same and possibly take irrational risks. When the markets are plummeting and we read everywhere about recession and crisis, we tend to panic sell. Investing money requires a steady hand and a certain degree of self-control, i.e. you must not let greed or panic tempt you into rash actions.<\/p>\n<\/div>\n\n\n\n \n\n\n\n <\/div> \n\n\n\n <\/div>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/div>\t\t\n\t\n\t\n\t\t\n\t<\/div>\n<\/div>\n\n\t\t\n

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Are You Looking for the Right Wealth Manager? <\/h2>\n\t\t\t\t\t\n\t\t\t\t<\/div>\n\t\t\t\t