Is investing right for me?

Step 2

How do you handle your money? Are you the kind of person who makes financial decisions effortlessly or are you indecisive when it comes to your personal money matters? The way you handle your money says a lot about you as an investor. In this step, we’ll find out what type of investor you are, based on your answers to several questions. Investing involves risk. You could lose (all or part of) your initial investment.

Step 1. What is investing?

Back to the overview

Step 3. Can I invest risk-free?

Why do you want to start investing?

Are you looking to make money fast from investing? If so, we have to disappoint you. Chances of that are slim. Investing is really something where you have to be in it for the long haul. The longer you invest, the smaller the risk of disappointing investment results leading to you failing to achieve your investment goal. After all, the stock market has good and bad years. So, to take maximum advantage of the good years, you need patience.

Toon Verberg

Are you an active or a passive investor?

Is investing something you find interesting? Are you willing to make time to follow the stock market news? If you can answer ‘yes’ to both questions, it looks like you’re an active investor. An active investor decides for themselves what investment instruments to invest in. If investing does not really interest you or you have no idea where you’ll find the time for it, don’t worry, passive investing may be more your thing. Let’s take a look at the difference between active and passive investing.

Active investor	Passive investor
You’re willing to put time and energy into investing. You like to follow the latest financial and stock market news, for example.	You prefer not to have to put a lot of time into investing. When it comes to financial news, you only read the headlines.
You develop your own investment strategy.	While you do want to invest, you’d like someone else to do the work for you.
You choose what shares to buy on the stock market and keep up with the latest developments at the companies and funds you invest in.	You’re happy to let investment experts decide what products to include in your portfolio.

What level of risk is right for you?

As we already mentioned at the previous step, investing is something you do with money you can spare. But even then it can be nerve-racking to see your investments drop in value. When that happens, will you have nerves of steel or would a sharp drop in the value of your investments keep you up at night? This is something you should consider beforehand, because you might then want to consider going for low-risk investment vehicles with a smaller chance of severe price fluctuations. After all, sleeping well at night is also important.

On to the next step

So now you’ve got an idea of the type of investor you are. Great! In step 3, we’ll explore the various ways you can limit the risks of investing.

Investing involves risks

Investing involves risks. You could lose (some of) the money you invested. If you are going to invest, it is important that you are aware of this. Invest with money you can spare. Read more about the risks associated with investments.

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