5 tips for your share investment
How do you measure the success of share investments?
In principle, shares should generate a higher return than interest-bearing forms of savings. Accordingly, recommendable equity investments have a return over a longer period of time that is significantly higher than a reference interest rate, for example for German government bonds. This is made up of the increase in value due to the rise in the share price and any distributions made. In addition, an actively managed portfolio should achieve a higher return than the relevant index or a passive fund that tracks it.
Tip 1: Always remember the trade-off between return and risk
No gifts are handed out on the capital market - rather, rationally thinking traders work here who precisely assess and evaluate risks and opportunities. For this reason, there is a close correlation between return prospects and the risk of losses. This may sound a little abstract, but an example makes the trade-off easy to understand: German Bunds are considered absolutely safe, which is why they have a low interest rate. Many blue chips, i.e. large blue chips, also offer a high degree of security, but there is little reason for euphoric price fantasies. Start-up companies in the life sciences and digitalisation sectors, on the other hand, can more than double their share price within a short period of time if they develop positively - or fall into insolvency in the event of a crisis.
Tip 2: Always stay on the ball and continuously monitor the market
Ideally, shareholders keep themselves informed daily about the development of the stocks they hold and the capital markets. In the Internet age, this is not time-consuming and is even fun - especially if you use the https://exness-vietnam.asia/mt4/ der for this purpose. It shows you at a glance which quotation your shares have, as well as many other useful data. These include:
Daily high and low
Performance over different time periods
Key figures, such as the price-earnings ratio or the dividend yield
Note: For each stock, the stock inspector publishes current news in short form on an ongoing basis.
Tip 3: Check and compare alternatives
Keep an open mind and remain flexible in your investment decisions - as a rule, there are various ways to invest in certain sectors. Put the stocks in question to the test in order to select the most promising one. The stock inspector helps you by presenting alternatives within the industry. These are German and international stocks.
Tip 4: Include fundamental data in the analysis
Only if you know about a company's business activities, its long-term planning, its competitors and its position in the market can you adequately assess its future prospects. Fundamental analysis provides all the important information about a public company and makes predictions about its future performance on this basis. The stock inspector provides you with the following analysis tools:
Company profile
Analyst and earnings forecasts
Analyst sentiment
Tip 5: Keep a steady hand and a clear head
Modern online brokerage is inexpensive, yet every share purchase or sale triggers transaction costs that are detrimental to returns. For this reason alone, wise investors avoid hectic actions. Moreover, panic selling, just like supposed bargain buying, is all too often based on short-term misjudgements. Weigh every investment decision thoroughly and give the stocks you select enough time to develop positively.
