{"id":8687,"date":"2018-05-12T13:56:06","date_gmt":"2018-05-12T11:56:06","guid":{"rendered":"https:\/\/www.smolio.ch\/wissen\/why-participating-in-the-financial-market-is-definitely-worthwhile\/"},"modified":"2024-09-17T08:34:31","modified_gmt":"2024-09-17T06:34:31","slug":"why-participating-in-the-financial-market-is-definitely-worthwhile","status":"publish","type":"post","link":"https:\/\/www.smolio.ch\/en\/wissen\/why-participating-in-the-financial-market-is-definitely-worthwhile\/","title":{"rendered":"Why participating in the financial market is definitely worthwhile"},"content":{"rendered":"Lesedauer<\/span> 2<\/span> Minuten<\/span><\/span>\n

In his book “Stocks for Eternity”, J. Siegel writes that nothing is as profitable as investing your money in stocks.\nBecause in the long term, you can only win… And a lot.\nBut how? <\/span><\/p>\n\n\n\n

Betting against the stock market is not worthwhile.\nAnd it’s certainly not worth keeping your hands off it altogether.\nNevertheless, many investors shy away from it because they are afraid of the risk.\nHowever, Siegel reports on <\/span>Stable and secure returns on the stock market for 200 years<\/b> – Specifically, an average annual return of 6.6 percent between 1802 and 2012.\nThe following example is also impressive: one dollar from our great-great-great-grandparents would have grown into a fortune of over 700,000 dollars on the stock market over this period. <\/span><\/p>\n\n

So we could gain a lot.\nBut we could also lose a lot, <\/b> as we experienced not too long ago.\nThe shock of 2008 still runs deep for some of us.\nAfter many years of rising prosperity and unbroken confidence, everything suddenly went wrong.\nAnd the money was gone.\nIrretrievably.\nUnrecoverable.\nOr could it?\nLet’s take a closer look at Siegel’s arguments. <\/span><\/p>\n\n

According to Siegel, it took investors around 5.6 years to recover from the 2008 financial crisis.\nYou have to allow for a certain amount of time, because shares do carry a higher risk in the short term, <\/span>In the long term, however, they are the more stable option <\/b>compared to bonds.\nHowever, we must not be guided by emotions and opinions and make the biggest investor mistake: Buying at high prices when times are good and all investors are optimistic, and then selling at low prices when we no longer see a good end. <\/span><\/p>\n\n

So how can we maneuver through the ups and downs of the stock market – without losing our upward trajectory?\nFirst of all <\/span>start.\nAnd not later, but right away. <\/b> There is no good or bad time.\nBecause all knowledge about the stock market and its development is reflected in the current price.\nIf the forecasts are bad, we buy at lower prices.\nIf you have a long-term horizon in mind and only invest money that you can spare for a few years, then you can remain invested even if prices fall – you can ride out the downturn.\nYou can diversify risk by selecting global ETFs with broad market coverage and investing regularly.\n You can find out <\/a> everything you need to know about investing in ETFs in our eBook. <\/a> <\/span><\/p>\n\n

Finally, Siegel urges investors to remain realistic when investing in shares.\nWith an annual return of 6.5 percent and reinvestment of dividends, assets double every 10 years.\nWe should have a 10-year investment horizon, or even better 20 years, in mind for the portion of our assets that we invest in shares.\nIn addition, it is essential to keep an eye on the costs.\nHere, index funds or ETFs are a favorable alternative to actively managed funds. <\/span><\/p>\n\n