Swiss women wanted insights on this
On Saturday of last week we gave a live workshop on the Basics of Investing in Zurich. The 25 participants were very involved and asked us many questions. We loved it! You certainly have very similar questions when you think about investing ... so here's a summary!
When is the best moment in time to invest?
There is no perfect time to get started. But it is important that you do. Why? Every month or every year during which you do not let your money work for you, you lose capital. It is a simple as that: If you leave the money in the checking account or savings account, you earn near to nothing given the current low interest rate environment. And since the current inflation rate (about 2%) is higher than the interest you receive on a savings or checkings account, the delta between both has a negative impact.
How much should I invest?
The sky is the limit. Note that in Germany, you can already start investing at EUR 25 per month (by having an ETF savings plan – ETF stands for Exchange-traded fund). We recommend that you begin with a little more capital – for example, EUR 50 or 100 per month. Alternatively, you can also start with a one-time investment - about EUR 2000. Then, let your capital work for you long-term (over thirteen years).
If you live in Switzerland, then pay attention to the fee structure of online brokers. They may charge you inactivity fees if you do not invest at least every three months. In that case, it makes sense to invest your money on a quarterly basis. If you want to know more about investing with ETFs, read our article "Girls just want to have funds" in the "Investing" section.
Should I invest in foreign currencies (FX)?
Our point of view is that investing in foreign currencies is suitable for women something for women who already have previous experience as active investors. The principle is: you buy a foreign currency (eg US dollars) and hope that the dollar increases in value, so that you can sell your investment in that currency at a later date profitably. However, this requires that you pursue the exchange rate actively (ideally every day). It therefore requires a certain time commitment from you.
What is the difference between share and bond ETFs?
As a general rule, index funds based on shares include only shares. And ETFs that are based on an index of government and corporate bonds, mirror only those. If you want to create a balanced investment portfolio, aim for a good mix of both depending on your investment profile.
What do I have to be mindful of when investing in sustainability fonds?
Take your time to determine whether the fund operator's criteria for a sustainability ETF match yours. Ideally, you read the fact sheet and decide whether the selection of the companies included suits you. You can read our article "Make Money and Do Good: Sustainable Investing" to get an idea of what sustainable investment entails.
What should I know about gold as an asset?
Gold is often mentioned as a safe investment when it comes to hedging against inflation risks. Maybe you even have a grandmother who swears by gold. Despite the increasing number of articles being published on this strategy, , you should take a critical look at the hype. The the price of gold fluctuates. In addition, it is set in US Dollars - but you live in the Eurozone and so you have a currency risk. The German consumer association “Stiftung Warentest” has created a short overview on gold (in German): “Goldpreis - Gold als Geldanlage”.
How do I find the right stock to invest in?
If we had the answer to these questions, we would be rich. All jokes aside: when engaging in so-called "stock picking", the analysis and the selection of stocks, different valuation criteria play a role. One option for you would be that you familiarize yourself with this these criteria and select stocks accordingly. You can also take a risk and invest in forward-looking industries or in former start-ups who have undergone an initial public offering process (IPO) and whose board members you know. We have published an article regarding the valuation of shares.
How do companies chose where they are listed?
A criteria for companies is in which countries the majority of their shareholders are present. In addition, the cost factor plays a role - are the services of one stock exchange more cost-effective than those of another? Today, more and more transactions take place on electronic stock exchanges - companies benefit from the increasing digitization.
How do I know whether I own common or preference shares?
First of all, some companies offer both common shares and preference shares. This is a German feature. When you buy a stock, pay close attention to which category of share you purchase (should both be available to you): the common share allows you to attend Annual shareholder meeting and contribute to decisions.
What is discussed during the annual shareholder meeting?
If you own common shares, you have the right to vote on the fate of the company at the annual general meeting. Typical agenda topics are: economic situation of the company, strategic outlook, compensation of the Management Board, amount of the dividend.
What are future trends?
At the workshop, the question arose which promising industries exist together with companies in which you can invest. The keywords Artificial Intelligence (AI), Robotics, Biotechnology, Virtual Reality ... read the topic in any case, because it could also be relevant in other areas (such as your professional development).
Written by Caroline-Lucie Ulbrich
Finelles Founder. Coach and organizational consultant (ECB, Deutsche Bank and UBS).