Many private investors are currently facing a puzzle. The safe harbor or checking account only casts off minimal interest. Experts therefore advise the money to invest in the stock market. But how can investors there simultaneously increase their money safely and with low risk?

Current situation for investors

With key interest rates just above the 0% mark, savings accounts with banks are no longer worthwhile, because there are also only just over 0% interest rates per year. In addition, the savers in Cyprus and Spain have already been asked to pay and subsequently expropriated by the state.

The logical consequence: if possible, only very small amounts should be parked on the bank so as not to end up even losing money. In addition, an annual loss in value through inflation can in no way be offset by interest on the savings account, or overnight money. Already now, savers pay extra – even if they do not get it as directly held as in expropriation.

Investing in the stock market

It is still advisable to invest a portion of your own capital in equities. It is important to rely on high-yield companies. Naturally, investors can do a lot wrong with the thousands of public companies. Therefore, even here, the risks can be limited when investors buy shares of companies whose value hardly fluctuates. ... 

Stock prices fluctuate – that’s well known. How much they fluctuate is expressed in terms of volatility. Another word for it is fluctuation, which says very exactly what it is about.

If you want to invest in a company and consider buying shares in shares, then a look at the volatility – or “Vola” for short – is often appropriate .

Decision using the volatility model

With this model you can decide how many shares can be bought. The calculation is based on the fluctuation range of the share. You have to be clear about how much money you are willing to risk per share. Furthermore, it is important to set a stop-loss level, which regulates from when the securities should be sold again, if the price falls.

The next step is to choose an individual period and determine the highest and lowest price of the stock. For stock investments, the period should be rather larger, often at least one month is recommended. But there are also 10 days, as well as 60 days or more. If these two values ​​have been determined, their difference or distance is calculated. ... 

In general, one can distinguish between two types of risk – the systematic risk and the unsystematic risk. A systematic risk is involved in most investments. For example, a significant political event could affect multiple investments in your portfolio. It is almost impossible to protect yourself from this risk.

The unsystematic risk is also called “specific risk”. This type of risk affects only a few investments. An example of this is bad news that has a negative impact on the stock of a particular company – such as a sudden strike.

Risk diversification is the only way to protect yourself from this risk. There are many special risk forms that apply especially to stocks and investments.

Credit or default risk

The credit risk (or default risk) is the risk that a company or individual will not be able to meet financial demands or pay the interest associated with these claims. This type of risk particularly affects investors who have bonds in their portfolios.

Government bonds, and Bunds in particular, have the lowest default risk and the lowest returns, while corporate bonds tend to carry the highest risk of default, but also bring a high return. Low-risk bonds are generally safe investments, while high-risk bonds are considered scrap bonds. ... 

In addition to the liability insurance, household contents insurance is a must for personal security. Rely on tailor-made solutions.

A liability insurance is just as important to the insurance as home insurance.

With these insurance policies, you protect yourself against major financial challenges if you are liable for personal injury, property damage or financial loss to others or if your belongings are destroyed, for example, by force majeure.

With a little online research, you can quickly make an insurance comparison and find the right insurance and the optimal rate for yourself and your loved ones. Secure your belongings and assure yourself in good time.

Household insurance – in case of fire, water damage, burglary

The household insurance is one of the property insurance. The inventory of a household against fire, tap water, storm, hail, burglary, robbery and vandalism is insured.

A household insurance jumps in these cases and refunds the insured the cost of purchasing new equivalent inventory. Thus, a household insurance can protect you from major financial losses. ... 

Bonds are not a real alternative in 2018. As rising interest rates depress prices, a sizaeble interest rate level should be awaited.

At some point it had to come. The recent collapse of stock markets just after the fifth week of the year raises the question of whether bonds in 2018 will rise again from the ashes.

When the rally of stocks comes to an end, actually offers a switch to interest rate securities. But first, a few cloudy days are a long overdue correction if necessary. And secondly, even 2018 bonds are not yet a real alternative.

Bonds remain 2018 not a real alternative

As an investor, you should wait until a decent interest level is reached again. After all, bonds are subject to their own dynamics: an increase in interest rates depresses the price of the outstanding securities. This can be more frustrating than offsetting stocks.

In any case, given the recent slump, the outlook for an unscheduled rate hike by the US Federal Reserve played a role. The reason for this was the unexpectedly pronounced wage growth in the USA. In order to counteract escalating inflation, interest rates are usually raised. But if money and credit become more expensive, this slows down economic growth. Higher interest expenses and wages are also denting corporate earnings. ...