Investing In Germany: 10 Tips
Learning about investing in Germany, a key player in the world’s economy is a must have education especially if you love to invest. Germany has emerged the biggest national economy of the European Union as well as the fourth biggest economy in the world as recorded by nominal GDP in 2008. With her organized economy, skilled workers and reliable infrastructure, Germany is indeed a great financial power. Before you begin your investment in Germany, there are some key things you should watch out for as detailed below.
- Guarantees. You must always know that every investment guarantee giving to you can only be as good as the company issuing it.
- Spread your investments. Your investments should always be spread out. You should ideally never have more than 10% of your entire portfolio in any one strategy or fund, in spite of the product.
- Complex Schemes. Every scheme with multiple products should be treated with suspicion, as they’re usually not in the best interest of the investor.
- Be conservative: You should be conservative at all times irrespective of your views.
- Independent Advisor. Work with independent advisors and insist that you have a copy of all documentation plus a risk and record analysis of your needs and wishes as well as a current prospectus and application forms.
- Abnormally High Returns. If an investment is sounding too good to be true to you, it probably is. There are no laws backing the promise of abnormally high returns to potential investors.
- Beware of unclear claims. Beware of claims of high returns you do not understand.
- Cooling off period. Use the two week cooling off period given to investors after signing the application form, especially if you are feeling uncomfortable about a suggested investment.
- Investment Platforms. Always use a platform to manage your German investments. As the annual cost of using a platform is low while it automates the business process of dividend collections and stock payments.
- Investment Advice. As the German tradition is to buy investment products from one of the banks, you must be careful about the financial advice they’re offering you as most of the banks are just sales men.