Economy

Invest money with the ETF savings plan: you should pay attention to this

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  • Despite the impending recession and falling share prices, the time may be right to invest money in the long term.
  • Wealth management is handled, for example, by robo-advisors such as Oskar. With the voucher code BI2020 you can get from Oskar now 20.00 EUR free starting credit.
  • With ETF savings plans, you invest your savings every month in index funds with a wide range and thus minimized risk.

The corona crisis also hit the financial market and caused prices to plummet worldwide. Therefore, you fear that now is the wrong time to invest capital. But the opposite is the case. So you can even benefit from the fallen share prices – at least if you now create an ETF savings plan with a long investment horizon. Because even if there are short-term drops, you can now achieve long-term attractive returns with an ETF savings plan. If you don’t want to take care of the selection of suitable ETFs yourself, you can rely on robo-advisors like Oskar (with our voucher code BI2020 you get 20.00 Euro starting credit here).

What
are ETFs at all?

ETF
is an abbreviation for Exchange Traded Fund. It is about
exchange-traded funds. ETFs are also referred to as index funds because they use
Show an entire index, such as the Dax, for only one security.
That means: if the stock index rises by one percent, the index fund also rises
by one percent. So you can understand the performance transparently.

And
how does an ETF work?

With an ETF, your capital is distributed as described on a stock market index and thus on the shares in the index. How much money is put into which stock depends on the weighting in the index. For example, if a share is weighted ten percent in the index, ten percent of your capital goes into that share. This is done passively, without the help of an investment company or a fund manager. Instead, you can simply manage your system yourself or get help from Robo-Advisorn like Oskar. These are systems that provide automatic recommendations for investment.

What
are the advantages of ETFs?

For you, ETFs have the advantage that this form of investment is much cheaper than traditional funds. The fees are significantly lower because no fund manager has to select, buy or sell stocks. In addition, index funds often do better in the long term than actively managed funds. This is not only due to the lower costs, but also due to their relatively constant development. You would never have done a minus business like this if you had invested in an index like the Dax for over twenty years – no matter when you started it. As a guideline, you can expect an annual return of around eight percent. But there have also been decades with average returns of up to 19 percent. This is exactly why ETFs are so well suited for savings plans with a long investment horizon (for example, for retirement provision).

How
does an ETF savings plan help build wealth?

With
With an ETF savings plan, you don’t just put money aside on a monthly basis, but rather
invests your savings in index funds at the same time. In the long run, can
your wealth will increase by itself, as ETF savings plans from the
Developments on the stock market benefit. So they offer you higher ones
Yield opportunities as bank savings plans with a fixed interest rate. Because they
are broadly diversified and based on an index, they are at the same time
less risky than investing in individual stocks – so you are not betting yours
all capital on one card. Even with price fluctuations and unexpected
You can break in with an ETF savings plan from as little as EUR 25 a month
build up a small fortune in the long run.

How
can you create an ETF savings plan?

To create an ETF savings plan, you first need a securities account. If you don’t want to worry about choosing suitable ETFs yourself, you can rely on robo-advisors like Oskar. At fixed intervals, digital wealth management invests your money aside in up to ten ETFs with worldwide spread. The capital is divided into stocks, bonds and gold and you have the opportunity to decide how high the risk should be. If you prefer to be on the safe side, choose the MSCI World, which reflects the development of more than 1,600 stocks from 23 industrialized countries, as your stock index. If you are a little more risk-taking, an ETF savings plan on the German small cap index SDax might be an option. Simply decide on one of five different investment strategies and a monthly savings rate from EUR 25.00. The rest then runs fully automatically via Oskar. You can track the progress of your savings plan via the app and of course have access to your money at any time. There is no minimum term and notice period and of course you do not have to pay any cancellation fees.

Is
now the right time to create an ETF savings plan?

Although the stock market is far from stable at the moment, now is the perfect time to start creating an ETF savings plan with a long-term investment horizon – especially if prices continue to fall. Because this also reduces the price of the individual ETFs. With a fixed savings rate, you can buy more shares in the index fund. Although this will bring relatively little in the short term, in the long run it will pay off in a significantly higher return. And even if the prices rise again against all expectations, you benefit from it with an ETF savings plan. Reason: The prices are currently 50 percent below their historical peak values. Even if they recover quickly, you will get an attractive return.

Which
Are there any costs for an ETF savings plan with Oskar?

So there is every reason to create an ETF savings plan now, for example to put money aside for old-age provision. For this service you pay 0.8 percent per year for investment amounts of EUR 10,000.00 or more, or one percent for investment amounts that are lower. There are also external product costs of 0.14 percent per year, which are already included in the price for the ETFs and are not calculated separately. By the way: As a reader of NewsABC.net, Oskar gives you 20.00 euros in starting capital for your ETF savings plan. Just give the code when you register BI2020 at.

Risk warning: The investment involves risks. The value of an investment can go down or up. The invested capital may be lost. Past performance, simulations or forecasts are not a reliable indicator of future performance.

Disclaimer: We are looking for products for you that we think you will like. We have an affiliate partnership with OSKAR, i.e. if you redeem our voucher and conclude a savings plan, we get a small commission. NewsABC.net Deutschland GmbH is a subsidiary of Axel Springer SE. Axel Springer SE also has a stake in OSKAR.de GmbH.

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