How Do I Start Investing?

How Do I Start Investing?

Good preparation is the first step in investing. Even if the first steps seem simple, a structured approach is crucial to avoid mistakes and be successful in the long term. If you make a clear plan at the beginning, you lay the foundation for sustainable asset accumulation.

Important Questions Before You Start

Before you make your first investment, you should answer key questions:

  • How much money can I invest in the long term without jeopardizing my financial security?
  • How high is my risk tolerance – and what is my position on price fluctuations?
  • What are my goals – retirement provision, asset accumulation or short-term opportunities?

These answers have a significant influence on your investment strategy and help you choose the right products.

Risk Profile and Strategy

When investing, it is important that the chosen strategy fits your risk tolerance (how much fluctuation you can absorb emotionally) and your risk capacity (how much loss you could bear financially). Together with your investment horizon (how long you want to invest the money), this results in your personal risk profile.

What Does This Mean for the Strategy?

The investment strategy is crucial for long-term success: studies show that around 80% of a portfolio's return performance depends on the strategy chosen, i.e. how capital is distributed across different asset classes. It is therefore not so much short-term tactical decisions that are decisive, but a consistent alignment with a clear strategy – and the discipline to maintain it even in uncertain times.

The strategies differ mainly in the proportion of equities. Equities offer higher return opportunities in the long term, but also bring with them stronger price fluctuations. The higher the equity component, the greater the risk – and the more important it is to have sufficient risk tolerance, risk capacity and a sufficiently long investment horizon to be able to sit out market fluctuations. Below you will find an illustration of the most important strategies. 

Avoid Mistakes

Especially at the beginning, many investors make two mistakes: they invest without a clear strategy or are guided by short-term trends. Don't bet everything on a single investment (see diversification) and only invest capital that you can do without in the long term. Don't let emotions tempt you to make hasty decisions, but stay true to your strategy and review it regularly.

Continuous training will also help you to make more informed investment decisions and strengthen your financial competence in the long term. Our e-learning Financial Markets and Products offers you a good foundation.