In search of returns

Darstellung des Börsensaals

Have you also decided to invest your money on the stock exchange, but need more information in advance? Or are you one of those people who suspect that most of your shares are risky and think you don't have enough assets to invest on the stock market? We would like to eliminate these reservations and provide you with several good reasons for investing in exchange-traded securities. It does not matter whether you have more or less assets.

Shares are an ideal alternative to savings books and time deposit accounts.

In Germany, interest-bearing investments such as savings books, fixed-term and overnight money accounts are still regarded as safe investments. The current interest rate level, however, is at an all-time low. Low interest rates hardly compensate for the loss in value of money due to the inflation rate.

Company shares, offer a way out of this difficult situation for interest savers. Thanks to low interest rates, listed companies can raise capital cheaply, which increases the value of the shares of these companies. Shareholders can benefit in two ways from the positive development of a company: First, through the possible annual distribution of the company's profit, the dividend, and through possible price increases. Shares are also better equipped against inflation than, for example, conventional savings books. In the past, shares with high average returns (price gains and dividends) almost always performed better. 

However, investments in securities are also riskier than other investments. In contrast to the savings book, securities can suffer price losses. Such loss risks can be minimized by long-term investment strategies and capital diversification.

Stock market investments are uncomplicated and flexible

For example, if you invest your money in the long-term development of DAX® companies, you are investing in one of the world's most stable stock indices. In the past, an investment in DAX shares did not result in any losses over a period of at least 15 years. This stability far exceeds the returns from savings book and call money interest rates.

Stock trading on the stock exchange is investment and retirement provision at the same time

A share purchase on the stock exchange is suitable as an investment and thus also as an additional retirement provision. The share price performance of recent years proves that a long-term investment can significantly reduce the risk of equities. 

As the DAX example shows, it is particularly advisable to invest in securities over the long term. Those who have invested on the stock exchange for 15 years or more were able to achieve average annual returns of 8 percent in the past with a broadly diversified portfolio of shares. 

Here is a simple calculation example: initial assets of 10,000 euros grow to 21,589 euros within ten years with an average return of 8 percent, which is more than a doubling. 

Patience pays off at the stock exchange. Price increases of securities often occur with a time lag. If you diversify your equity investments and invest for several years, the risk of short-term equity investments is transformed into long-term predictability. Shares thus become an instrument of investment and supplementary retirement provision.

For a stock market investment you do not need large assets

"Should I invest my money in the stock market? Don't I need a lot of money for that?" These kinds of concerns and alike are unfounded. The decisive factor for success on the stock market is not the initial capital, but a long-term investment horizon and a good diversification into different values. Banks and online brokers offer savings plans with which you can regularly invest a fixed amount in shares or funds. In the long run, this allows you to achieve a considerable amount of savings. 

Investments in companies on the stock exchange are therefore suitable for everyone who wants to take their investment into their own hands. Our series "entrance" on boerse-frankfurt.de offers you simply understandable details to the various investment possibilities. So you will be fit to open your own securities account tomorrow.