Who do you rely on to make the right choices for your investments? Your Uncle Luc, your banker or just yourself?

Your uncle Bob

Your uncle Bob has been working at the local insurer for more than twenty years and is the “mister finance” of the family. So when you start investing, you are more likely to follow his advice – completely free of charge. But are you sure he can recommend an optimal portfolio? After all, diversification among different types of securities, sectors and regions worldwide is crucial to control risk and optimize potential returns*. And can your uncle also be there for you in case of problems?

Blogs like ‘Become a Trader’

The offer looks tempting. After all, the blog promises you sky-high returns* thanks to its trading formulas. Moreover, you don’t have to take too much risk as positions are only held for a few days at most. But beware: don’t be fooled. According to the French stock market watchdog AMF (Autorité des Marchés Financiers), 89% of individuals who were active on trading markets ended up losing money.

Investing yourself

Of course, you know better than anyone else what you need yourself. We can never advise you enough that you should pay sufficient attention to your investments, and also to how much they will yield and cost you. However, investing on your own is not something you do just like that. After all, it takes time and a certain amount of expertise. Also make sure that your emotions do not take over and that you do not let yourself be led by the wrong reflexes. Of course, this is easier said than done!

Your bank’s financial advisor

The bank may be your first contact with investments. In fact, you will receive a call as soon as your savings account exceeds its liquidity reserve limits. The advantage is that your financial advisor already knows you a little and you can meet him. Then again, according to a survey by Test-Aankoop, the main disadvantage is that the advisor could have a tendency to sell his employer’s products. For example, almost half of bank branches would give bad advice on investments.

Investment formulas

Here the options are many. Through a mutual fund, for example, you can invest part of your savings in a large number of (funds of) stocks and/or bonds according to your investor profile. Those funds are usually very well diversified, but don’t forget to get enough information about the costs and managers of those funds. Newer are the robot advisors that manage your portfolio for a lower price, but always based on your investor profile. The algorithms of these robots follow predetermined scenarios but obviously cannot take into account the human aspect…

Conclusion

As you can see, there is no miracle solution for your investments. All solutions have advantages and disadvantages. So it is necessary that you remain critical, both about the cost and the quality of the advice. The most important thing is that you choose a solution that suits you best, meets your objectives and, above all, fits within an investment approach rather than a speculative one.

*Without result or performance guarantee