Plan

1. Define the time horizon. If you don't know him, try answering a simple question for what do you save? For the next holiday or purchase of goods ? For access to a better education for your children? For retirement? Or do you simply want to save for unforeseen situations (money for dark days)?

2. Diversify: depending on the period of time you are investing for, you can also guide yourself to an allocation of your investments. To reduce your risk and increase your chances of reaching your goals. The future can bring many surprises so it is good to create a diversified portfolio of investments: deposits, bonds, shares or investment funds that contain a diversity of instruments themselves.

DID YOU KNOW? Classic savings instruments can be safe and predictable in the short term, but in the long run they can bring modest returns and often even below the level of inflation. At the same time, history shows us that in the long run investing in shares can bring better performance and with less risk of losing purchasing power. But they can be very volatile over short periods of time.

Below are graphically presented data on the real annual yields (adjusted for inflation) recorded in the US market for deposits, bonds and shares between 1928 and 2000, depending on various holding periods. 

As can be seen, the risk and returns obtained depend on the type of financial instrument in which the investment was made and the holding period.

3. Invest periodically: that is, month by month, it has the purpose of both creating a habit and reducing the risk. By investing periodically you will diminish the chances of investing a large amount at the wrong time.

You can try a simulation of your investment over different periods of time and in various return scenarios with the help of the planning tool provided by BRD Asset Management S.A.I.