2. Magic word diversification
“The stock market is dangerous!” Say skeptics of stocks, ETFs & Co. This statement can not stand still and needs to be differentiated: It is true that a stock market investment is riskier than a call money account, but only the stock market really offers the opportunity to make money to let work for you. And: the stock exchange is only dangerous if investors invest wrongly, too riskily or too one-dimensionally.
One of the most important rules for stock exchange trading is therefore: Never bet everything on one horse, spread your capital as broadly as possible across countries, industries and products away. There is little point in buying just one stock or just stocks from the same industry. If such an investment yields long-term profits, then you have probably been very lucky – in no case should this “investment strategy” be the yardstick 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 money account or a time deposit account as a security component in addition to stocks, ETFs, certificates, investment funds, bonds and commodities such as gold.
A security module should optimally compensate for fluctuations on 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 raw materials, but into overnight money or time deposits. A security component of 25 percent is sufficient for offensive investors, in this case a quarter of the capital invested goes into safe investments. Balanced investors are right with a 50/50 mix, defensive investors should safely invest about 75 percent of their total capital.
Investors who plan to invest for a period of ten years or more can also choose bond funds if they invest in euro bonds or are hedged in euros. In “Finanztest” edition 11/2018, Stiftung Warentest recommends, for example, these bond funds for Euroland government bonds: 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 testers, all of the pension funds mentioned are “1. Choice”. The following Euroland pension funds also rated Finanztest 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 Buy Fund Guide. By the way: mixed funds that already consist of a yield module and a security module due to their construction must be allocated proportionately to the safe and risky module.
Note: Of course, not all products are necessary to diversify an investment well. A security module with interest investments and a yield module are sufficient. The latter can consist, for example, of an ETF on the MSCI World Index as a base investment and a profitable addition.