Approximately € 250 billion is nowadays parked on Belgian savings books. You can safely take that ‘parking’ literally: the interest is so low that this money produces almost nothing. Even more, inflation can even make you lose net purchasing power. “The expectation is that interest rates will not rise again in the coming years,” says Siev Daniels. “We can deduce that from the policies of the Earncode Bank. The erosion of the amounts on your savings account could therefore continue. ”
A savings account is certainly a useful tool if you use it for what it serves: making sure you build up a reserve to cover unforeseen expenses and to fund projects in the short or medium term, says Daniels. “With savings that can be put aside for a longer period of time, customers have to ask themselves: is it really necessary that I put all this money on a savings account?”
As a possible alternative, investments are quickly made and that is a word that still frightens many Belgians, wrongly, says Siev Daniels. “Although investment products involve more and greater risks, they can nevertheless deliver a higher return. Investing comprises a very broad spectrum of products. The trick is to choose the portfolio and the products that suit you best and that is something that the Bruids advisers can perfectly help with. ”
What then does that choice depend on? “First and foremost of course: how risk-sensitive are you? That is a consideration that everyone must make for himself. It is quite possible to put together a very defensive investment portfolio and it is also important to understand that these types of portfolios will generally yield a lower return than a somewhat more dynamic portfolio that also entails a higher risk. In addition: what are your projects in the short and long term and what is your investment horizon? Investments are usually made for a longer period of time, at least five years. If you know that you are going to build a house within six months, it is of course not very useful to invest that money in a securities portfolio now. ”
Consider a fund
Bruids advises to invest through investment funds, rather than through individual shares or bonds, says Siev Daniels. “Firstly, diversification is already ensured there: your risk is spread over many different shares and / or bonds. Secondly, the portfolio is managed by professional managers who continuously monitor their positions and the markets in order to be able to respond optimally to market opportunities. ”
Who wants a simpler investment solution with regard to the monitoring of its portfolio, can also choose a fund of funds, which is a mutual fund that invests in mutual funds. “With these funds, the composition of the fund is regularly brought back into line with the investor profile of the client,” explains Siev Daniels. “In the product range that Bruids selects, we offer different funds of funds that may be suitable for investors with a defensive, moderate or more dynamic profile.”
In terms of revenues, given the very diverse landscape of funds, it is difficult to give concrete figures, says Daniels. But one thing is certain: “In the longer term, by investing and therefore by taking more risks, you can generally count on a higher return than with a traditional savings account.”
Do you wish to see which alternatives are available for your savings? Or to put together an investment portfolio that is tailor-made for you?
Then visit your Bruids adviser, he will gladly help you further.
We remind you that investment products are exposed to risks including a possible loss of the invested capital. Investment products are not bank deposits and are not guaranteed by Bruids NV | SA.