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Is Investing for me?

Written by Nik Rainer | 5 minutes
For investors, 2019 was a good year, with gains of 20 percent and more on the stock markets. Certainly now that interest rates are so low, investing seems attractive. But is investing suitable for everyone? And what are the risks? Saskia Klep, director of BinckBank Netherlands, answers ten important questions.

1. Why is the stock market doing so well?
The movements of the stock market are difficult to explain, let alone predict. But it is undeniable that 2019 is a good year for investors. The markest rarely had such a strong period and is now at its highest point since 2001. Stock market experts give several explanations for this, in particular the continuing economic growth and very low interest rates.

2. It remains a difficult choice. Do I have to invest or save?
Historical figures indicate that over the longer term investing yields higher returns than saving. Especially when you want to build up capital for later investing is a good choice. Plus, saving actually costs money right now. With an interest rate of zero you go backwards after inflation and tax. At the same time, be aware that when investing, no guarantees can be given for that extra return. You will always have to take risks into account. Your investments may also be worth less. That is why it is important to always keep a buffer of savings.

3. Will the Dutch invest more?
The number of investors in the Netherlands fell for some time during the crisis years and the financial problems this caused for families, but there has been steady growth in recent years. Several thousand investors are now added every month. The Netherlands currently has around 1.5 million investing households.

4. How can this growth be explained?
The fact that the stock market has been doing well for a number of years obviously plays a part and attracts new investors, including more young people and women. And of course the low interest rate, which means that a savings account now yields nothing and makes investing more attractive. But other things also play a role. Investing has become much simpler in recent years - partly due to automation and smart apps - while at the same time capital accumulation has become necessary for more and more Dutch people.

5. What exactly is that?
In recent years, a great deal has changed in the area of pensions and the labor market - mainly due to the government. We have to work longer and fewer and fewer Dutch people are automatically building up a good supplementary pension. In particular, flex workers and self-employed persons without employees will really have to take care of this themselves. But also Dutch people with a permanent job who want to stop working a few years earlier or also want to have extra money for fun things later in life.

6. Is investing not too complicated?
That used to be the case, but nowadays everyone can invest. The accumulation of assets is increasingly going through so-called ETFs, with which your money is invested automatically and follows the stock market index daily. Therefore you do not have to constantly keep an eye on the stock markets and delve into them. In addition, investing is also increasingly automatic. Money that is deposited - once or periodically - in an investment account is automatically invested by us on the basis of previously communicated personal preferences. So you actually don't have to worry about that anymore.

7. How does this work exactly?
By indicating in advance how much money you want to invest each month, when you need this money again and how much - or how little - you want to take the risk. On that basis, the money is invested in a mix of shares and bonds. And also in subsequent years, this will always be invested as well as possible in accordance with these specified personal wishes and goals. We strictly adhere to that.

8. But for that I first need a substantial amount of money?
No, you can automatically invest periodically via Binck Forward from as little as 10 euros per month. If you continue to do this, or perhaps a slightly higher amount, for a large number of years in a row, you will see that you can build up a nice capital in the long term.

9. I would like to. But won't you just see that the stock market is going down again next year?
That risk always exists with investing. But the fact remains that better returns are achieved in the longer term than with saving. Historical figures show that. Of course, there are also lesser stock market years in between. That is why we always emphasize that when investing and capital accumulation, patience and a long-term breath are especially important. Spread your investments and invest for a long period! You then reduce these risks and, above all, allow time to work for your money. And you also have a better chance of a good return.

10. Why should I opt for BinckBank?
At BinckBank we say that we are "crazy about investing". We deliberately do not do mortgages, insurance and loans. We were the ones investing in 2000 the investor market broke open for the small investor. With much lower rates and fully online investing via a beautiful platform. For small and large assets and for active and passive investors. Twenty years later, we are still the only real and largest investor bank in the Netherlands.


Nik Rainer

Nik joined BinckBank in 2016 as part of the team responsible for rolling out the Saxo Bank international service. Nik has held positions at various banking institutions such as Hambros Merchant Bank, Standard Chartered Bank and Morgan Stanley and brings his solid financial background to the role. Working with the development of new client services and relationship management, Nik also contributes to local publications and forums.

The information in this article should not be interpreted as individual investment advice.  Although BinckBank compiles and maintains these pages from reliable sources, BinckBank cannot guarantee that the information is accurate, complete and up-to-date. Any information used from this article without prior verification or advice, is at your own risk.  We advise that you only invest in products that fit your knowledge and experience and do not invest in financial instruments where you do not understand the risks. 

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