When is a good time to start investing?

Spread the entry points and reduce the risk

That is a very good question. The answer is that the ideal entry point does not exist. No one can predict whether the stock markets will rise or fall in the coming months. Besides, nobody knows what investments will be worth tomorrow.

If you want to start investing, it is wise to enter at different times. You do not have to invest all your money in one go. You can do this over a number of months or even years, which spreads the risk.

TIP! Spread your entry moments

If you were to invest your money in one go, you wouldn’t know whether it was the right time. The solution: spread your investments. This way you buy investments if they are both more expensive and cheaper and so the purchase price averages out.

Options to spread entry points

Periodic investing

Periodic investing is a supplement to ABN AMRO’s forms of investment, one which you can set yourself. With a periodic deposit, you buy additional investments each time. As a result, your investment will grow and, if all goes well, your return too. You decide everything: when to start, how often and the amount to invest, whether to adjust anything and when to stop.

Example:
Suppose you have € 200 that you want to invest each month. You first have to choose the form of investment that suits you, for example one of the five ABN AMRO ESG Profile Funds of Guided Investing. You make an initial investment of € 200 in the profile fund of your choice. You can then immediately set this amount to be your periodic deposit per month. Hence, you automatically invest € 200 every month and after one year you have invested € 2,400.

Read more about Periodic Investing

Spread investing

Spread investing can be done with the amount you want to use to invest. You divide the investment over a number of entry points during one or more years.

Example:
Suppose you have € 10,000 to invest with. You want to spread your entry on the stock exchange with this amount. For instance, you start with € 2,000 and then invest the remaining € 8,000 at four different moments spread over one or more years.

Risk spreading: how to start?

A wider spread ensures a more stable development of the value of your investments. You will have fewer large deviations, both down and up.

Spreading the risk of investing can be done in the following ways

Time:
buy investments at different times over one or several years. In this way, you have multiple purchase prices which can be averaged out.
Period:
be patient with investing and let your money pay off for a longer period of time. In this way, the peaks and troughs of the stock market are smoothed out and you have a greater chance of a good return.
Investment products:
buy various investment products such as shares, bonds or mixed funds. In this way, you are less vulnerable to, for example, interest rate changes on bonds.
Business sector:
buy investments from different business sectors. If you only invest in oil-related companies, for example, you are vulnerable to losses when the oil industry experiences bad times.
Geography:
buy investments from different countries and continents. This keeps risks contained if things don’t go very well in one country or on one continent.
Investment funds:
a fund is a combination of different stocks, bonds or a mix thereof. In this way, you spread your risk with just one purchase.

Start investing now

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