'Safe' investing

What is 'safe' investing?

Though risk-free investing is not possible, there are strategies to mitigate the risk, depending on your risk profile. Think of a balanced mix of investments, ranging from relatively safe investment categories such as government bonds to more risky ones such as real estate and shares. By finding a good balance between equity (funds), bond funds, commodity funds, real estate funds and liquidity (cash savings), you can spread risks and better align your portfolio with your goals and risk appetite. 

What is the importance of safe investing?

Protecting your assets can help keep financial goals achievable and provide some security for the future. Safe investing means minimizing risks and can thus help to ensure that your assets are not only preserved but can also grow. Investing wisely will help keep the value of your investment relatively stable, so you'll be better able to cope with unexpected financial setbacks and realize your future plans. Achieving your long-term returns without taking unnecessary risks gives you another valuable thing: a relaxed feeling - which may contribute to your sleep. On the other hand, those who invest too safely may also achieve too little return, which makes financial goals more difficult to achieve. Risk and expected return go hand in hand when investing.

Choose a form of investment that suits you

Choosing the right form of investment is also important to achieve your financial goals and to travel the road to them relatively comfortably. At InsingerGilissen, you can choose from three different main forms: Investment Advice (you invest on the basis of our advice), Asset Management (we invest for you, also called Discretionary Portfolio Management) and Execution Only (you invest yourself, without our help: we only execute your trade orders). 

You can hold shares, bonds, trackers, real estate and investment funds in your investment account. Each form has its own level of risk and potential return. It is important to choose an investment form that matches your knowledge, personal risk appetite, your financial situation and the period in which you expect results. By selecting a form of investment that suits you, you can invest with confidence and better achieve your goals.

Please find more information about asset management/discretionary portfolio management on this web page.

Invest periodically

Instead of investing your entire capital at once, periodic investing can be a wise choice. For example, by investing a fixed amount monthly, quarterly, or annually, you will gradually build up your portfolio. The advantage of this is that you can start with a small amount and that your investments are less sensitive to strong fluctuations in the purchase price. Periodic investing ensures that you enter the market at different times, so that your purchase price will be average and you can realise a stable growth, regardless of whether the market temporarily rises or falls. There is also an investment strategy based on it: 'dollar cost averaging', also known as 'the constant dollar plan'. You can read more about this on our webpage about investment strategies. 

Historical returns offer no guarantee for the future

While it is tempting to base investment decisions on past returns, this is no guarantee of future results. Market conditions can change rapidly due to economic developments, political events or technological innovations. Investments that have performed well in the past may underperform under new conditions. It is therefore important to look beyond historical figures and make a thorough analysis, not only of current and future market conditions but also of the investment approach with which the returns have been achieved. Is it accompanied by relatively large risks? Was it a coincidentally favorable investment decision or is it based on a disciplined investment process? This will prevent you from blindly relying on past success and allow you to make better, more forward-looking investment choices.

Draw up an investment plan and set your goals 

Creating an investment plan is essential for successful long-term investing. A good plan will help you stay focused on your financial goals, such as pension accrual or increasing your wealth, and provide guidance during market fluctuations. In an investment plan, you determine how much risk you are willing to take, what investment horizon you have in mind, and how you will diversify your investments. By setting clear goals, such as how much return you want to achieve over the long term, you can ensure that your investments remain in line with your financial ambitions. Read more information about drawing up a good investment plan on our webpage about investing with our advice.

Different forms of investment returns

When investing, you can receive returns in various ways. This can be done, for example, by receiving interest on short-term loans or bonds, by the dividends that shareholders receive from the companies in which they invest or by the price gain when the market value of an investment increases. Each type of return has its own characteristics and risks and plays a role in the total return on your investments. For example, investments that can yield price gains can also fall in market value and yield negative returns if the decrease in value is greater than the dividend received. Investment funds that pay dividends usually calculate their achieved returns by adding to the price result the dividends paid as having been reinvested in the same fund on the ex-dividend date. 

Investment websites such as Morningstar usually use three types of return: price return (i.e. without counting any dividend), gross total return (price return plus fully reinvested dividends) and net total return (price return plus net reinvested dividends after deduction of withholding tax). 

Interest

Interest is a form of return that you receive when you save or invest in bonds (loans) or other interest-bearing investments such as mortgage bonds. In the case of bonds, this is usually a fixed amount per year, which you receive from the issuer of the bond (the government or the company). Loans offer stable, predictable returns, which makes it attractive to investors looking for lower risks, although there are also loans from companies that are less financially sound and therefore carry a higher risk. This is called credit risk. If a company can no longer meet its obligations, not only the price of its shares, but also of its bonds will fall.

Although fixed income prices tend to have fewer ups and downs than equity investments, their price development does depend on market conditions, the economic outlook, interest rate developments and central banks' policy rates ('interest rates'). For example, when interest rates rise, the value of current bonds falls because a higher interest rate is paid on newly issued bonds. This risk is called the interest rate risk. Nevertheless, many long-term investors who want to invest 'safely' like to invest in bonds. Because despite any interim price falls, the bond will always be repaid in full at the end of the term under normal circumstances. The price of a bond therefore always creeps towards the end of the term to the repayment value of the loan. 

Dividend

Dividend is a (profit) distribution from companies to their shareholders, in return for making capital available. This can be a constant dividend payment, as is the case with shares of companies with a stable profit pattern, or variable, depending on the company's profits. Dividends offer investors a way to benefit directly from a company's profitability, without having to sell their shares. Dividend investing, or investing in shares with a relatively high dividend yield, is especially attractive for investors who are looking for income in addition to possible price gains, for example as a supplement to (their) income. Dividends can make a significant contribution to the total return. If the dividend is reinvested in the same share, those new shares can also grow in price and thus boost the total return – provided, of course, that the price continues to rise on average. Sometimes companies choose to pay dividends in shares rather than in cash: this is called stock dividend. Then shareholders will receive more of the same shares. 

If a company periodically pays a relatively high dividend, this can have a stabilizing effect on the price development. This can be attractive to investors who prefer investments with less risk. If the stock market falls as a whole, shares with a relatively high and stable dividend yield usually fall less sharply than average. But the other side of the coin is that such stocks tend to rise less sharply when the broad market rises. There are investment funds that focus specifically on these types of stocks. These are called 'high income funds' or 'high dividend funds'. These funds may be attractive to investors who are happy to leave the selection and management of relatively high-dividend investments to professionals. The broad diversification offered by these investment funds also contributes to dampening the investment risk. 

Koerswinst

Price gains occur when the market valuation of an investment, such as a stock or bond price, rises relative to the price at which you bought it. When you sell the investment at a higher price than you bought it, you realise a price gain. This type of return can vary greatly depending on market developments and economic factors, among other factors. Price gains can yield high returns, but investments that can rise sharply usually also involve higher risks. The market value of investments is not guaranteed and can of course also decrease. This means that there is a price loss, and the total return (price gain + income such as dividend or interest) can become negative. 

Responsible investing at InsingerGilissen

Responsible investing is an important starting point at InsingerGilissen. We focus primarily on protecting our clients' assets. In addition, we aim to benefit from stock market rebounds. We have achieved excellent results with this in the past. As one of the top asset managers among private banks in the Netherlands, we are proud of our awards. In 2018, 2019, 2020 and 2021, InsingerGilissen was awarded the title of best private bank in the Netherlands for four years in a row, thanks in part to the excellent investment results of our Asset Management.

In addition to financial returns, we also strive for social returns. All our investments comply with the principles of the United Nations' Global Compact. We also exclude certain investments that are harmful to people, the environment or society. In addition to the investment service Asset Management, we also offer Investment Advice. In addition, clients regularly receive tailor-made investment advice from our experts, in which we strive not only for financial returns but also for social impact.