Risks associated with investment
Les risques liés à l'investissement
Investing always involves the risk of loss of capital[1]. The level of risk depends on the risks associated with the financial instruments in which you invest, as well as on the way in which you manage your investments.
However, some good practices enable you to limit the risks associated with your investments.
However, some good practices enable you to limit the risks associated with your investments.
- Only invest the money you do not need in the short term; investing requires a long-term perspective. So always keep a reserve equivalent to 3 to 6 months’ salary to handle unforeseen expenses.
- Diversify your investments: this will make your portfolio more resilient in case of bad news about one particular security or sector.
- Define your objectives as well as your investment horizon and ensure that you adjust the risks you take accordingly.
How to limit your risks?
Step 1
The right time horizon
Before starting to invest, ensure that you do not need your money soon, and decide whether you are ready to take the necessary risks. What are your investment objectives and how important is it that you achieve them? Are the consequences of failure important?
In general, the more time you have, the better your chances of achieving the objectives you have set. En général, plus vous disposez de temps, plus vous avez de chances d’atteindre l’objectif que vous vous êtes fixé.
In general, the more time you have, the better your chances of achieving the objectives you have set. En général, plus vous disposez de temps, plus vous avez de chances d’atteindre l’objectif que vous vous êtes fixé.
Step 2
Diversify your investments
Diversifying your investments helps reduce the risks you take when investing. For example, if you only buy equity in a single company and things go badly for that company, this will have a major impact on your portfolio. By diversifying – that is, by investing in several companies in different sectors – the impact on your portfolio will be more limited.
Diversification can be practised in different ways. For example, you can use different types of investment, such as: equities, bonds, investment funds or trackers (ETFs), for example.
In addition, you can diversify by sector and by region. By spreading your investments across different sectors and regions, you will be less severely impacted if, for example, a macroeconomic problem arises in one region or if a certain sector is affected.
You can create a diversified portfolio yourself, thanks to our MeSolo package. You will find a wide range of funds, ETFs, equities and bonds on your personal platform. If you do not wish to manage your own portfolio, MeManaged is the best solution for you. If you opt for MeManaged, MeDirect will use a questionnaire to assess your financial situation, your investment objectives, knowledge and experience, your preferences in terms of sustainability and your risk tolerance, to define your investor profile. MeDirect will then invest the money you entrust to us in light of this profile.
Diversification can be practised in different ways. For example, you can use different types of investment, such as: equities, bonds, investment funds or trackers (ETFs), for example.
In addition, you can diversify by sector and by region. By spreading your investments across different sectors and regions, you will be less severely impacted if, for example, a macroeconomic problem arises in one region or if a certain sector is affected.
You can create a diversified portfolio yourself, thanks to our MeSolo package. You will find a wide range of funds, ETFs, equities and bonds on your personal platform. If you do not wish to manage your own portfolio, MeManaged is the best solution for you. If you opt for MeManaged, MeDirect will use a questionnaire to assess your financial situation, your investment objectives, knowledge and experience, your preferences in terms of sustainability and your risk tolerance, to define your investor profile. MeDirect will then invest the money you entrust to us in light of this profile.
Step 3
Improve your knowledge and expand your experience
Your knowledge in the area of investments and the experience you have gained are important aspects to take into account. You cannot assess the risks of a type of investment or product unless you understand how it works.
On your personal platform, you will find all the information needed to understand the products in which you wish to invest, as well as the associated risks.
Don’t feel like handling your investments yourself? By opting for MeManaged, you leave your investments to the experts. MeDirect will invest your funds in accordance with your investment profile.
On your personal platform, you will find all the information needed to understand the products in which you wish to invest, as well as the associated risks.
Don’t feel like handling your investments yourself? By opting for MeManaged, you leave your investments to the experts. MeDirect will invest your funds in accordance with your investment profile.
Step 4
Is it preferable to invest smaller amounts on a regular basis?
The markets fluctuate in response to economic and political changes. This has an impact on the value of your investments. You may find it safer to invest a small amount regularly rather than a large amount all at once.
As a result, you will be less likely to invest the entire amount in the market just before a downturn. Therefore, you will spread out your entry into the market and thus spread your risks.
By investing in an investment fund, you pay no entry, exit or custody fees. The list of costs for each type of investment is available on www.medirect.be
As a result, you will be less likely to invest the entire amount in the market just before a downturn. Therefore, you will spread out your entry into the market and thus spread your risks.
By investing in an investment fund, you pay no entry, exit or custody fees. The list of costs for each type of investment is available on www.medirect.be
Which investment service suits you best?
If you are unable to choose, no problem. Let us help you by way of the test below. By answering a few simple questions, you will quickly determine which investment service is best suited to you.
Let us manage your investments
We will put together an investment portfolio for you. Just fill in the questionnaire so that we can determine your investor profile. MeManaged is available starting at €5000.
Do it yourself
Choose from among our wide range of funds, equities, bonds or trackers (ETFs) and invest on your own using MeSolo.
1Although it is possible to lose all your capital, losses are usually limited to only a part of it.
Past performances aren’t a guarantee of future returns. MeDirect does not provide investment advice.