Have you built up a healthy buffer in your savings account, which will cover you for unforeseen expenses? And are you thinking about investing money that you don’t need right now? If so, you’ll obviously want to know how much you could earn by investing. This depends on several factors, including the period you’re willing to leave your investments, the level of risk you’re prepared to take and potential fluctuations on the stock market.
It’s important to only invest money that you can do without. If you’re considering investing, we recommend that you keep some money as a buffer for unforeseen or major expenses. So first work out how much you can, and want to, invest. Once you’ve decided how much you can afford to invest, set your investment goal, investment period and the level of risk you’re prepared to take.
Goal
Why are you trying to build up your assets? To buy a camper van, travel the world, supplement your pension or fund your child’s university fees? And how much can you afford to invest? Once you’ve got this straight, it will be easier to decide how long you want to invest your money for and how much risk you’re prepared to take.
Period
When do you need the money? Is it fairly soon, in five years or so, or can you wait for 20 years, for example? In general: the longer you can leave your investment, the more likely you are to generate high returns.
Risk
Do you want to run a low or a high risk with your investment? Or somewhere in between? In general: the higher the possible returns, the higher the risk and the more you stand to lose.
This graph shows you what your return would have been if you had made a one-off investment of €1,000 in one of the five ABN AMRO ESG Profile Funds on 1 January 2019.
Source: ABN AMRO Investment Solutions, Morningstar. Yields as at 31/12/2023, in euros and after deduction of fees. Net dividends reinvested (if applicable). Based on a geometrical calculation method. The value of your investments can vary. Past results are not indicative of future results.
Investing involves fees, such as service and product fees. The value of your investments can vary. Remember that you might lose all or part of your initial investment if you sell investments at a time when prices are below your average purchase value. Past performance is no guarantee of future results.
One of the biggest challenges for any investor is to keep a cool head. Investing is something you do for the long term. You must be patient with your investments and leave your money to generate returns. This will smooth out fluctuations on the stock market. When it comes to shares, you should bear in mind that there can be great highs and deep lows in the short term, but returns on shares are generally higher in the long term. Getting into investing early in life can reduce the risk involved in investing in shares.
If you’ve just started investing, take a regular look at whether anything in your circumstances or goals has changed. It’s important to be aware of the amount you invested, the period you had in mind, and the level of risk you opted for, so that you can change anything if it becomes necessary. You can invest in funds whereby you buy several shares and/or bonds in a single transaction, like one of the five ESG Profile Funds, for example. Depending on the specific fund, this diversifies your investment across different continents and automatically spreads your risk. You won’t have to monitor the stock market every day or make decisions about buying and selling, because you’ll have a professional fund manager to do this for you.
You are ready to get started. You have sufficient balance in your linked account and you want to buy your first investment. But what do you buy? What would be a good choice? Perhaps you already know exactly what you want. If not, let us point out the things you should bear in mind.
If you want to build up your knowledge before you start investing, or just want to understand it better, learn the basics in just 8 steps.
Investing involves risks. You could lose (some of) the money you invested. If you are going to invest, it is important that you are aware of this. Invest with money you can spare. Read more about the risks associated with investments.
