Advantages
- Safe investment
- High availability at all banks
- Investment usually possible without prior knowledge
- Investment forms suitable for all investors
Disadvantages
- With higher returns, usually long-term commitment
- Lower liquidity
- Slow asset growth
- Often low returns
High-yield forms of investment
High-yield investments are those that offer high interest rates, high distributions or dividends. Usually, high-yield investments are associated with a higher risk for investors.
Shares
Shares are considered a risky form of investment, since the return always depends on market fluctuations and the respective company development. However, those who invest thoughtfully in shares can achieve high returns. However, there is no guarantee of profits.
Bonds
Bonds are still considered very safe among the high-yield investment forms, as they guarantee a certain interest rate over several years. However, investors should pay close attention to the creditworthiness of both government and corporate bonds.
Funds
Funds and investment funds are securities that are traded on the stock exchange. Funds are managed by investment companies that spread investors' capital over several investment areas. Compared to investing in individual shares, the diversification of fund investments offers greater security. However, the level of return depends on the composition of the funds and thus on the work of the respective fund managers. In order to determine the return on funds, it is important for investors to take management fees into account.
ETFs
Exchange-traded funds (ETFs) are funds that are traded on the stock exchange. Investors usually rely on passive fund management. The funds are put together on the basis of benchmarks. The management costs are generally lower due to passive management.
Tangible assets
Real estate, works of art, vintage cars, jewellery or even high-quality designer clothing can be used by investors to invest their money. Whether this will generate a high return often remains uncertain, as there are no fixed rules or benchmarks for value appreciation. Risk-averse investors should think carefully about what they are investing in.
Derivatives and structured financial products
Derivatives such as CFD's in Exness broker review or options can bring investors very high profits. However, equally high losses are possible. The prerequisite for long-term success with this form of investment is a profound knowledge of the facts and the market.
Basically, there is no one best form of investment. Instead, investors should rely on a well thought-out mix of different forms of investment. Which method they choose always depends on their own risk tolerance and the capital available.
If you already have 500,000 euros, you can get over losing 30,000 euros speculating on the stock market. On the other hand, those who have saved for many years in order to build up a fortune of 100,000 euros will act more cautiously and instead prefer security in their investments.