Five good reasons to start regular investing

To invest in a regular investment plan, you don’t need to budget huge amounts. A few euros are enough and, very often, there is no entry or exit fees. Each deposit is automatically invested at regular intervals in a diversified investment fund which will give, over time, a higher yield than your savings account.  

Investing involves risks. The markets are so unpredictable and are blowing hot and cold from one year to another. You don’t have the absolute guarantee that you can recover the capital invested, even with a regular investment plan, but if you choose a long-term investment, you lower the risk by smoothing out the markets highs and lows. By investing at different times, you obtain over time an average price, benefit from a stable return and don’t need to wonder if you have chosen the right moment to invest your money. 

With a regular investment plan, you simply have to define your investor’s profile, choose the most suitable products for you and decide how much to deposit on a regular basis. You can do it with the help of your banker or your financial intermediary. For the rest, there is nothing you need to do. The selection of equities and bonds, or funds for a fund of funds, is made by financial professionals. 

The most common mistake of investors, both novice and experimented, is to allow their emotions to control their investment decisions. When prices are falling and economic news are gloomy, few are those who can manage their anxiety in order to avoid panic selling. And when the prices are rising, it is not always obvious to control your euphoria which can lead you to take unreasonable risks. With a regular investment plan, you keep a clear head, control your emotions and are no more sensitive to market changes. You keep investing the same amount, regardless of whether the prices are falling – you buy at a good price – or rising – you avoid buying at a too expensive price.   

Regular investment plans are flexible. If you have to face an unexpected expense or, on the contrary, you receive a large sum of money, you can stop, reduce or increase the amount of your regular payments.

Regular investment may be an interesting option, especially when the interests on the savings accounts are at an historic low. However, don’t forget the basic principles of prudence: don’t rush into a regular investment plan without having beforehand examined the question from all sides and got the maximum of information from your financial institution. 

11/2021