Although the interest rates on classic investments such as savings accounts, fixed-term deposits, and overnight deposits have been at their lowest point for years, these are still among the most popular investments. However, investors cannot generate a reasonable return with it. To invest your money profitably, there are better investments.
Best investment in 2021
The low-interest-rate phase has been pushing interest rates for classic, safe investments down for years – and there is no end in sight. Consumers who want to avoid their savings in their accounts depreciating due to inflation must therefore open up alternatives in 2021 as well.
There is the one best investment not 2,021st Rather, the optimal capital investment represents a mix of safe and return-oriented options. Interested parties should consider various equity funds for their capital investment strategy. Because a well-mixed, managed fund can generate a noteworthy return in 2021 as well. Passively managed index funds or ETFs, which nobody should do without when investing their money, are somewhat cheaper in terms of the cost structure.
When looking for the best financial investment in 2021, the following applies in general: In order to save a nest egg, overnight money and fixed-term deposits are a very safe, but low-interest option. On the other hand, other forms of investment such as individual shares are designed for high returns.
The risk of speculating on one’s wealth is, however, comparatively high. Accordingly, only a small proportion should flow into these investments. The same applies to corporate bonds, for example via crowd investing.
The classic gold is likely to be part of a successful investment strategy in 2021 as well. However, like other raw materials, this does not generate any current income, for example through dividends. Investors only bet on future price increases.
Investors should not only rely on a single investment when building up their wealth but should distribute their money over several investments. A well-positioned and successful portfolio, for example, builds on a mix of overnight and fixed-term deposits as well as equity funds.
Investment in comparison: how can consumers invest their money correctly?
First of all, reducing debt comes before investing. This is also provided by the basic rules for investing, which the financial services supervisory authority BaFin has recorded in an information brochure.
If potential investors are debt-free, these are the next steps:
- Get an overview of your financial situation and find out how much money is freely available.
- Define investment goals (e.g. for old-age provision, to protect the children, for a property)
- Determine different types of investment in order to diversify the risk of loss. The principle of “putting everything on one card” is bad advice when it comes to investing.
Find the right investment
In order to avoid a total loss, it is important to build your own investment on several pillars. The past shows, for example, that funds with an investment horizon of at least 15 years have often developed positively. But nobody can look into the future. Smart investors know about their risk and therefore diversify their investments. Part of the capital should therefore be invested securely, for example in fixed deposits.